Company Law 101 - Varsha Aithala

What is a Company? Definition Why choose company structure? Separate legal person Artificial person Limited liability Special management What are the disadvantages of company structure? Private company Public company Other forms of legal entities Sole Trader Association Partnership Trust

Company formation, functions and main parties Incorporation Shelf company Directors – Board What are their functions? How are directors appointed and removed? Duties Officers – CEO Employees Creditors Shareholders

Essential concepts Shares Types – relevance Rights of shareholders Advantages TASK: Marple is the Managing Director of Miners Ltd. a large nickel mining company. The company has recently developed a new method of prospecting resulting in information as to the presence of nickel ore in Africa. Marple discussed the main terms of service with Miners Ltd. whereby he was asked not to divulge to any other company any of the methods or processes used by Miners Ltd. There was no specific period for which he was required to do this. Subsequently, he leaves the company and forms a new company, Nickel Ltd., in which he is the major shareholder. Marple controls the operations of the new company. Directors of Miners Ltd. discover that Nickel Ltd. is employing the new method of prospecting developed by Miners Ltd. They complain to Marple about the matter, but he replies that in his opinion Nickel Ltd. is quite entitled to use the method in question. Use your knowledge of contract law and discuss: What remedies, if any, do Miners Ltd. have? What defence does Marple have?

Main documents Articles of Association/Constitution Memorandum of association Statutory registers

Quiz: Accountants were hired to __________________ the company’s spending. disclose audit indemnify A __________________ is a company that is controlled by another company. subsidiary company holding company trust company A __________________ is any person or company who, directly or indirectly, has or shares voting interests or the right to make investment decisions. beneficial owner trust nominee shareholder I wasn’t aware that you were also working for our main competitor. This seems to me to be a serious __________________. power of attorney conflict of interest difference of opinion An ordinary share might have a __________________ of 100p, but its market value will be determined by supply and demand in the marketplace. denomination par value capital requirement A __________________ is a corporation that owns enough voting stock in another company to exercise control over it. shelf company holding company shell company

The company will amend its _____________________ to reflect the reclassification of shares and the rights to shareholders. memorandum of association stock ledger articles of association We support the proposed _____________________ of the group’s convenience stores from its supermarkets. spin-off franchising downsizing The Directors may exercise the powers given by Clause 3 of the _____________________ of the Company. stock ledger statutory forms memorandum of association All registered companies must complete the _____________________ and file them with the appropriate governmental authority. (?) statutory forms stock ledgers derivative suit

Meetings Types Shareholders Directors Importance

Raising funds If you had the freedom to start a business – what structure would you choose? Why? What do you have to do to start running the business? If you choose a company, how will you raise funds – what all are the expenses that a company will incur? What is your business model? Make an elevator pitch to a wealthy investor about why he should invest in your business

Procedure to start a company: https://www.gov.uk/topic/company-registration-filing/starting-company What are the chief sources of funding for a company? https://www.youtube.com/watch?v=677ZtSMr4-4

Winding up /Dissolution Voluntary Compulsory winding up Compromise or arrangement Liquidation