It is not possible for a company to capitalise profits to pay up new shares that are then to be allotted to individuals who are not currently shareholders in the company, as the company would effectively be issuing fully-paid shares to those individuals for no consideration, ie at a discount. It is a fundamental

When a company is solvent and has no financial concerns, broadly speaking the company and its directors owe fairly limited duties to creditors. However, when a company is insolvent, or is verging on insolvency (the insolvency point), there is a shift in the directors’ duties. The shift moves the directors’ primary duties away from the company’s members and towards the company’s creditors as a whole (the insolvency duties). Breach of those duties can result in personal liability for that director, or disqualification, and in some instances a criminal prosecution. See Practice Note: Directors’ duties: companies in

In the absence of anything to the contrary in a company's articles of association, as between a company and its shareholders, it is those shareholders on the register of members at the time a final dividend or special dividend is declared or the decision is made, to pay an interim dividend (as the case may be) who will be entitled to the dividend (Re Wakley, Wakley v Vachell). For a discussion of the law and practice on the payment of dividends, see Practice Note: Dividends—the legal framework. Dividends must be paid in accordance with the rights

As more fully described in Practice Note: Trading disclosures, the Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015, SI 2015/17 (the Regulations) require UK companies to make certain trading disclosures including in relation to the company's name, share capital, directors and registered office. The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015, SI 2015/17, regs 21 and 22 require that any company (other than a company that has at all times since

This Q&A considers whether, where a company is contemplating a number of share buybacks, it must enter into separate share buyback contracts each dealing with a single proposed share buyback or whether it may enter into a single share buyback contract that deals with all the proposed share buybacks, each to complete on a different date. It is assumed that the company in question is a private company limited by shares proposing to buy back shares off-market and that the proposed share buyback is not for the purposes of, or pursuant to, an employees’ share scheme within the meaning of section 1166 of the Companies Act 2006 (CA 2006). The contract required for an off-market share buyback (unless it is a share buyback for the purposes of, or pursuant to, an employees’

This Q&A assumes that • the company is a private company governed by the Companies Act 2006 (CA 2006) • the document in question relates to a general commercial transaction The Mercury Tax case The Mercury Tax case (R (on the application of Mercury Tax Group) v HM Revenue & Customs Commissioners) considered the effectiveness of pre-signed signature pages. In response to that decision, the Law Society produced guidance in 2010 on the execution of documents by virtual means which covers pre-signed signature pages and virtual signings and closings where signature pages are exchanged by email. The guidance suggests good practice in light of the Mercury case and suggests different options for virtual signings/closings. The guidance assumes parties are executing documents using signatures. It does not refer

Can a company force or expect consumers to purchase a product (ie a mobile phone) by way of a credit agreement? Given the definition of credit within the Consumer Credit Act 1974 (CCA 1974), it is possible that all or parts of a mobile phone contract could form a credit agreement which would be covered by the CCA 1974. In general, monthly mobile phone contracts provide some form of financial accommodation either in the form of the initial cost of providing the handset, any recurring charges such as line rental and/or network access charges, inclusive minutes and texts etc. The credit is offered over a fixed period ie a contract length of 12 or 24 months.

A company will only be able to grant enterprise management incentives (EMI) options if it is a qualifying company for EMI purposes. There are a number of conditions to be satisfied, including that the company has a permanent establishment in the UK (or, if the company is a parent company, that any other member of the group that satisfies the EMI trading activities requirement has a permanent establishment in the UK). See Practice Note: EMI—qualifying companies for more details. Assuming that the company in question is indeed a qualifying company, there are then a number of conditions to be met for an employee to qualify to be granted EMI options. These include that the individual is an employee of the company whose shares are the subject of the EMI options, or a qualifying subsidiary of that company; and that the individual satisfies the working time requirement (that the average amount of the individual’s committed time must equal or exceed 25 hours a week or, if less, 75%

Under section 86 of the Companies Act 2006 (CA 2006), a company must, at all times, have a registered office to which all communications and notices may be addressed. See Practice Note: The registered office. The principal purpose of a registered office address is to receive statutory and legal company mail from Companies House, HMRC and other such organisations. However, many companies have a different business address to their registered address which,

HMRC guidance in its new Employee Tax Advantaged Share Scheme User Manual (ETASSUM) states that a company can amend its existing company share option plan (CSOP) in order to allow for options to be exercised up to 20 days before and after a change of control, but it does not suggest that any such exercises can be permitted at the discretion of the company. This differs from the guidance in the old Employee Share Schemes User Manual, which ETASSUM replaces. This indicated (at ESSUM44500) that 'It is acceptable

Moral rights The Berne Convention art 6 bis states that, independently of the author's economic rights, and even after the transfer of the said rights, the author shall have the right to claim authorship of the work, and object to any distortion, mutilation or other modification of, or other derogatory action in relation to, his/her own work, that would be prejudicial to his/her honour or reputation. Moral rights are therefore personal to the author. Sections 77–79 of the Copyright, Designs and Patents Act 1988 (CDPA 1988), provide that the authors of copyright literary, dramatic, musical or artistic works and the directors of copyright film works have the right: • to be identified as author or director (the right of paternity) • to object to derogatory

UPDATE: Since this Q&A was first published on 31 March, the HMRC guidance for employers: Claim for your employees’ wages through the coronavirus job retention scheme and guidance for employees: Check if your employer can use the coronavirus job retention scheme (first published on 26 March) has been revised on 4 April, 9 April and 15 April 2020. For information on the position as at 15 April 2020, see: Update (15 April 2020) below. The government published two sets of guidance on 26 March: • guidance for employers: