BPP exam kit

1) Off the shelf companies are companies that are created for no reason and put into stock. Ifuyo wanted me to form a company for you, I would turn to you and say “Here, sign these forms, and you can walk away with a company in less than 1 minute”

If you didn’t want a company instantly, then I would have to go through the process of creating one, getting it registered, waiting for the certificate of incorporation, completing all the necessary statutory forms …

Much quicker and easier for me to have done all of those processes and then I can simply sell you a company ‘off the shelf’

2) I don’t believe that I have ever heard the expression ‘novating a company’. Give me the full context in which you have found this expression

3) ‘Scribe’ is an old-English word / title for a person that writes and ‘sub’ is a prefix to indicate ‘under’ (hence ‘submarine’ means under the sea)

So a sub-scriber is a person that writes below or at the end of a document and, in the context of your question, the subscribers to the memorandum are those people that are formally confirming their desire to have a company created in accordance with all the foregoing detail as shown in the memorandum

4) Where a company is wishing to raise more capital, it is available to achieve that end in a number of ways. One of these ways is to find some wealthy people that are willing to invest in the company and the company will issue in exchange some of the company’s shares.

This is not a public issue, not available for you and me to join in. It’s a private matter between one or more individuals that the company has identified as being willing to invest and the company will place shares with those people in exchange for their investment funds

5) Called-up share capital is not a common phenomenon in modern times, though it does still occasionally happen. When a company is looking to raise extra, new finance, it could issue shares. If there is likely to be great demand from the public wanting to join in and apply for some of these shares, the company will likely set a strike price (the price per share that the company wants to receive for each share) at, say, $1.30 for each $1 share

(I’m using the dollar value that applied on the occasion of the issue of BT shares in the UK except, of course, the values were in pounds, not dollars)

But instead of asking the applicants (those people that applied to acquire BT shares) for the full amount of $1.30 payable immediately, the terms of the issue were that 50 cents was payable on the application, 40 cents payable one year later and the last 40 cents payable one further year after that

After one year, just before the second instalment, the shares in issue were $1 shares, 20 cents paid (the other 30 cents was share premium) and then BT contacted their shareholders and said “It’s time for the next 40 cents please”

So now those shares are $1 shares, 20 cents paid, 60 cents called-up

When the 40 cents have been received, they are now $1 shares, 60 cents paid

Then a year later, we have the same process “It’s time for the final 40 cents please” so now we have $1 shares, $1 called-up and, when the 40 cents have been received, they are now $1 shares, fully paid”

OK?

It’s where an existing contract is replaced by a new one maybe, or maybe not, incorporating some or all of the original contract terms

No, if you want to buy shares in BT now and you go ahead and buy them, you become a member of the BT company

But there are only a very limited number of subscribers to the memorandum – people who sign it before it goes to the Registrar for the purposes f creating a company

The subscribers are the first members of the company and nobody else that becomes a member can describe him / herself as a subscriber to that company