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Hello Sir,
I know students are not meant to post questions from kits and expect answers but i needed a few answers concerning two areas and this is through kit practice.I wanted to know how many shareholders are required in a public limited company, because shareholders and members are the same thing but the kit says one and the study hub says two. So i wanted to know which it is. (Kaplan Kit Q145)
The study hub also states that Articles of association should be sent during company registration but the kit says it should not. Now this is very confusing so i wanted to know which it is. Kindly assist me. (Kaplan kit Q180)
This is for the Law GLOBAL variant pleaseCompanies Act 2006 Section 9 (5) (b) tells us that Articles must be submitted at the time of seeking registration
Can you let me know the page number in the notes that says that there should be at least two members of a public company? I have a dim recollection that I changed this note some distant time in the past
In fact, the Companies Act is a little bit strange as it is only in Section 7 (1) that states that a company is formed by ‘one or more persons …’ and, from then on, the Act consistently refers to members / subscribers in the plural
I hope to hear from you soon so that I may resolve this issue
OK?
Hello again Sir,
I got this information from the ACCA study hub, chapter 11, section 11.2 which states;
It must be signed by each subscriber:
A public company must have at least two subscribers, since it has to have at least two shareholders.
A private company need have only one subscriber, since it needs only one member.
So according to this, a plc needs at least two members and a ltd company needs at least one member.And then, according to the study hub again, it states articles of association must be submitted but again i was doing the kaplan kit, Q296 Task 2, which again states it does not need to be submitted incase of model articles and this again has really confused me.
I hope to hear from you sir. thank you.
Ah, OK! Whereas a company requires a set of Articles of Association, it is available for a company to adopt, in full or in part, a set of model articles. In the event that the model articles are adopted in full, there is no need for the proposed company to prepare its own document. So, I suppose, it is true that a company does not need to submit Articles of Association. It may simply declare its full adoption of (what used to be called) Table A. (I’m not aware that that title has changed!)
As for minimum number, I too find this area confusing. Section 7 (1) of the Companies Act that I quoted in my previous post (one or more members …) covers the formation of companies both private and public. I have always understood that 2 was the minimum number for a public company. From re-reading relevant sections from the Companies Act, I could continue to believe that it’s 2.
However, when faced with the same question a number of years ago, I wrote to a firm of lawyers and asked them ‘What is the minimum number of members in a public company?’ and they replied ‘One’
I’ve just checked my own notes again and I had removed the ‘2 members minimum’ note.
So … in conclusion, I believe that it’s just 1 member but 2 directors
Incidentally, I wrote above that ‘I have always understood that 2 was the minimum number for a public company.’ Strictly speaking, that is not true! When I was learning all this stuff for my exams, the minimum number was seven (7). But why bother with that irrelevant history 🙂
I hope that this clears up your confusion. Or, at least, it hasn’t made it worse!
Oh no Sir, i did not mean it in that manner, it did help but for the case of members, there are alot of questions that give differing answers but in the case of the articles, you helped me out and i am extremely grateful. Thank you Sir.
This took a bit of time but I found the following that does indeed indicate only one member needed in a public company-
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