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GLOSSARY

Authorised minimum definition

Published by a LexisNexis Corporate expert

What does Authorised minimum mean?

The minimum nominal value of allotted share capital required for a public company to obtain a trading certificate or re-register as a public company (CA 2006, ss 765, 650, 662; Second Company Law Directive (77/91/EEC)).

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Incorporating a public company limited by shares—checklist

Incorporating a public company limited by shares—checklist For full details on the incorporation of a public company limited by shares, see Practice Note: Incorporating a company. Matter to be considered or step to be taken Companies Act 2006 (CA 2006) reference (if applicable) Tick box when step complete or matter considered Preparing to incorporate a public company limited by shares Will the company be tailor-made on incorporation or purchased 'off the shelf'? If the company is to be 'tailor made', proceed with the rest of the considerations and steps within this checklist. See further: Tailoring a shelf company limited by shares—checklist. N/A Who are the initial shareholders (also known as subscribers)? There may be just one subscribing shareholder. CA 2006, ss 9–10 Ensure the allotted share capital is of a nominal value not less than the authorised minimum. CA 2006, ss 761-767 Will the shares held by the subscribers be paid up in cash as to at least a quarter of their nominal value...

Re-registration of a company: from private to public—checklist

Re-registration of a company: from private to public—checklist This Checklist is a quick guide to the steps to be taken and the documents to be prepared in order for a private limited company to re-register as a public limited company under section 90 of the Companies Act 2006 (CA 2006), covering: • Preliminary considerations • Documentation • Meetings and procedures • Companies House filings and certificates, and • Post-registration matters Preliminary considerations Step Notes/Resources Tick box when step complete or matter considered Does the company have a share capital that meets the requirements for public companies? If not, steps must be taken to meet the share capital requirements before re-registration may take place. CA 2006, s 90Note: Only a private company with a share capital may be re-registered as a public company (which prevents private companies limited by guarantee from being re-registered as public).CA 2006, s 91Note: The share capital requirements for public companies are that the value of the company's allotted share capital must not be less than...

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Authorised share capital—continued relevance

Authorised share capital—continued relevance The allotment of shares is governed by the Companies Act 2006 (CA 2006). The requirements that apply differ according to the type of company that is proposing the allotment and whether that company has a single class of shares or multiple classes. In addition to the relevant statutory provisions, on a proposed allotment of shares in a company careful consideration will need to be given to: • the company's articles of association, and • whether the concept of authorised share capital is still relevant to the company The concept of authorised share capital is not to be confused with the requirement for public companies to have an authorised minimum allotted share capital, as to which see the section on Additional requirements for public companies in Practice Note: Incorporating a company. For specific information on the allotment of shares by different types of companies, see Practice Notes: Allotment and issue of shares—private companies with one class of shares, Allotment and issue of shares—private companies with more...

Financial assistance—fundamentals

Financial assistance—fundamentals Whenever any acquisition of a company’s shares is contemplated, careful consideration should be given as to whether the statutory prohibition on the giving of financial assistance applies. What is the prohibition on the giving of financial assistance? The Companies Act 2006 (CA 2006) prohibits: • a public company (or a subsidiary of it, whether a public or private company) from giving financial assistance directly or indirectly for the purpose of: ◦ the acquisition by a person of that public company's shares, whether the assistance is given before or at the same time as the acquisition takes place, or ◦ reducing or discharging a liability incurred for the purpose of acquiring that public company’s shares, where the shares have been acquired by a person (and whether or not the liability was incurred by that person or someone else) • a public company, which is a subsidiary of a private company, from giving financial assistance directly or indirectly for the purpose of: ◦ the acquisition by a...

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Board minutes—court procedure—reduction of capital—shareholder approval

Board minutes—court procedure—reduction of capital—shareholder approval Company number: [insert number] [insert company name] [ plc OR Limited] Minutes of a meeting of the board of directors (the Meeting) of [insert full name of company] the Company) Held at [insert location of meeting, eg the offices of the Company] On [insert day, month and year of the meeting] at [insert time of meeting][am OR pm] Present: [Insert names of the director(s) physically present][[Insert names of any directors present by telephone as permitted by the Company's articles of association] (by telephone)] [[Insert names of any directors present by other means permitted by the Company's articles of association] (by [insert other means]] [ In attendance: ] [[Insert name of anyone in attendance, who does not count towards the quorum for the Meeting (eg the company secretary, any legal advisers)]] [ Apologies: ] [[Insert names of any directors who are unable to attend the Meeting]] 1 Chair, notice and quorum [Insert name] was appointed Chair of the...

Board minutes—re-registration—private limited company to public company

Board minutes—re-registration—private limited company to public company Company number: [insert number] [insert company name] Limited Minutes of a meeting of the board of directors (the Meeting) of [insert full name of company] (the Company) Held at [insert place of meeting] On [insert day, month and year of meeting] at [insert time of meeting][am OR pm] Present: [Insert names of the director(s) physically present][[Insert names of any directors present by telephone as permitted by the Company’s articles of association] (by telephone)] [[Insert names of any directors present by other means permitted by the Company’s articles of association] (by [insert other means])] [ In attendance: ] [[Insert name of anyone in attendance, who does not count towards the quorum for the Meeting (eg the company secretary, any legal advisers)]] [ Apologies: ] [[Insert names of any directors who are unable to attend the Meeting]] 1 Chair, notice and quorum [Insert name] was appointed Chair of the Meeting. The Chair reported that due notice of the Meeting had been...

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Does a public company need to have a trading certificate if it opens a bank account?

Does a public company need to have a trading certificate if it opens a bank account? Section 761 of the Companies Act 2006 (CA 2006) provides that a public company (otherwise than one formed by virtue of re-registration as a public company) must not do business or exercise any borrowing powers unless the Registrar of Companies has issued it with a trading certificate. A trading certificate will be issued if the nominal value of the company's allotted share capital is not less than the 'authorised minimum' (currently £50,000 or the prescribed Euro equivalent), of which at least a quarter of the nominal value of the share capital and the whole of any premium must be paid up. There is no definitive authority for whether the opening of a bank account constitutes ‘doing business’ for the purposes of CA 2006, s 761. However, the following caselaw may be helpful: • ‘business’ is an occupation or duty which requires attention (Rolls v Miller at 88, CA, per Lindley...

Did Companies Act 2006 drop the requirement for a public limited company to have at least two members from 1 October 2007, and can a plc incorporated prior to 1 October 2007 become a single member company if the articles do not specifically state the company must have two or more members?

Did Companies Act 2006 drop the requirement for a public limited company to have at least two members from 1 October 2007, and can a plc incorporated prior to 1 October 2007 become a single member company if the articles do not specifically state the company must have two or more members? The Companies Act 2006 (CA 2006) did indeed drop the requirement for public limited companies to be incorporated with at least two members. The change took effect from 1 October 2009 (not 2007). Under the Companies Act 1985 (CA 1985), limited companies had to be incorporated with at least two subscribing members: ‘…1 Mode of forming incorporated company (1) Any two or more persons associated for a lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company, with or without limited liability.’ Note that although the text of CA 1985, s 1(1) encompassed both private and...

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