The Language of Company Law 9A

Who are the shareholders?

Who are the employees?

What do the directors of a company do?

What does an accountant do?

What does a company secretary do?

What does an auditor do?

What are creditors?

What are debtors?

I invested £5000 in Foxtrot Ltd by buying shares in the company. I am a … of the company. I am also known as a member of the company.

Foxtrot Ltd took out a loan from us six months ago. They owe us £4200. We are a …of Foxtrot Ltd.

I am a … of Foxtrot Ltd, together with two others, Mary Parker and Josh Copeland. Mary and I are also shareholders, but Josh does not own any shares in the company. Together we make all the decisions about the company and we are responsible for running the company.

I am a director of Foxtrot Ltd and I am also the company … This means that in addition to my duties as a director, I have the important task of making sure that I follow all the statutory requirements connected with a company, for example, sending notices of meetings to shareholders and sending documents to Companies House.

I am an accountant and I work for a firm called AB Chartry & Co. Most of my clients are medium-size private limited companies. One of my clients is Foxtrot Ltd. I have to check the company's financial accounts and make sure that they are accurate and show the true financial position of the company. I am Foxtrot Ltd's …

I work for Foxtrot Ltd as their .. . I deal with all the financial transactions of the company. For example, I send invoices to people and pay our suppliers. I also deal with the payroll each month to make sure that all of our employees receive their correct monthly salary.

I bought some goods from Foxtrot Ltd three weeks ago. The cost of the goods is £795.20. I have an invoice for these goods, which I must pay next week. I am a .. of Foxtrot Ltd.

I am one of Foxtrot's … I work in the sales department. I like working here. I receive a good salary and I also receive a commission on any new sales.

People or companies that provide goods or services to other people or companies, often on a regular basis.

A piece of paper that shows what you are buying and how much you must pay.

… are contracts of work between a company and a director. They are similar to contracts of employment. The agreement contains all of the details of the director's position, for example his or her remuneration, obligations, any restrictive covenant that applies, and a confidentiality clause.

... is a situation where a company does not have enough money to pay its debts.

… take place when two companies join together to form one company.

Obtaining money from banks, private individuals, or investment institutions is known more formally as …

… occur when one company buys another company. They are also called takeovers.

… is all of the legal work involved in setting up a new company.

… is changing the existing structure of companies with the aim of improving their performance.

Situations where two or more companies work together on a particular project for a limited period of time are called … Each company remains independent from each other.

Agreements between the members of a company are called … They are important as they contain the members' obligations to the company and to each other. For example, they state what happens when a shareholder wants to sell his or her shares.

All of the obligations and requirements of a director are called …

An abbreviation for post qualification experience. That means how many years a lawyer has worked following the date of his or her qualification as a lawyer. PQE is used frequently in job advertisements for lawyers.

In this context, it means 'did'.

To get more practice in doing something so that you become better at doing that thing.

The number and type of people and companies that a law firm provides a service to.

Run the company and make all the decisions about the company.

Advise the company about particular matters, but they do not take part in the daily decision-making.

Elected or chosen for a particular position.

A duty to act in the best interests of someone because that person trusts you.

Someone who, even though he or she has no official position of authority, gives instructions to the official directors.

A situation in which you are in a position of trust for more than one person and if you take a particular action, this will give good results to one person while at the same time giving bad results to the other person.

Give that information to someone or tell someone about it.

Dismiss that person from his or her position as a director.

Use that power.

This is equipment which helps people to move. For example, wheelchairs, crutches and walking sticks.

Honesty and sincerity, loyalty.

To do something to the best of your ability, is to do it as well as you possibly can.

Devastated

Who attends board meetings?

Who attends company meetings?

What are the minutes of a meeting?

What does the chairperson do at a meeting?

How often does an annual general meeting take place?

What does the abbreviation EGM mean?

There must be a minimum number of people attending a meeting before that meeting can continue. What is this minimum number of people called?

What are the two methods of voting at a company meeting?

We need at least five people to attend the meeting before we can make any decisions. There are only four people here, so we do not have a … present.

If you want to read what happened at a meeting, you should look at the … of the meeting.

The company's … takes place in March of every year.

Meetings of the shareholders are generally known as ...

I'm afraid there is not a quorum at this meeting. We will … the meeting now and hold it again next week.

The AGM of Great Finance plc will take place next month. One of the shareholders, Daphne Mercier, will be in France when the meeting takes place. Daphne asked her friend, Teresa, to be her … and vote on her behalf at the meeting.

One method of voting that is very often used at company meetings is where each shareholder raises his or her hand, in other words, voting by a …

Granger Ltd held its AGM last month. Now it is necessary to hold another meeting. This time it will be an …

The directors hold regular … and make decisions about the company. at which they discuss the position of the company

There are a number of matters that we must discuss. We need to … a company meeting as soon as possible.

All the shareholders voted by completing the voting form. This written vote is called a …

Two of the shareholders became very angry during the meeting and started to shout at each other. The … had to ask them to be quiet.

Both the directors and the shareholders make their decisions at meetings. These decisions are called ... If someone has a proposal that they want to discuss at a meeting, this proposal is called a … or a proposed resolution. The shareholders discuss each motion and then vote to decide whether or not to accept that proposal. When the shareholders accept or agree to a motion, we say that the shareholders '… a resolution' or '… a resolution'. This is another way of saying to approve of, or agree to, the decision.

There must be enough people voting in favour of a resolution in order to formally accept it. If everyone agrees to the motion, then the resolution is passed ... Unanimously means that everyone who is present at the meeting is in complete agreement. However, you do not need everyone to agree. It depends on what you are voting about. Some motions need a simple majority of over 50% of people who are voting to agree in order to pass them. These decisions are called ... Other motions need a majority of 75% of people who are voting to agree in order to pass them. These decisions are called …

You do not always have to convene a meeting in order to pass a resolution. Shareholders can make lots of decisions by using …, especially if the company is a private limited company. This saves the time and cost of holding formal meetings.

There are a lot of rules about holding company meetings. Some of these rules are statutory, which means the Companies Act 2006 requires companies to have these rules. In addition to these statutory rules, each individual company imposes its own rules. The rules of each individual company are in that company's articles of association. For example, if you are a director, you cannot just announce that you will hold a company meeting today! The company has to send a formal … of the meeting to the shareholders. That means you have to officially announce to the shareholders that a company meeting will take place. You also have to make sure you give the shareholders the correct number of days' notice. You must study a company's articles of association very carefully to make sure that you follow all these rules.

Our advice is to ask a solicitor to explain your company's articles of association to you so that you fully understand all of the procedures concerning meetings.

The shareholders passed a decision to issue 100 new shares.

We will now discuss the following proposed resolution, proposed by Jane Edwards.

The shareholders accepted a resolution to change the name of the company.

This resolution is a decision which requires over 50% of the votes to be in favour of it in order for it to succeed.

The company sent a formal announcement to all of its shareholders informing them that the company is convening an EGM, which will take place on 12 June.

This resolution is a decision which requires at least 75% of the votes to be in favour of it in order for it to succeed.

The shareholders passed the resolution with complete agreement.

For most matters, the shareholders of Restart Ltd do not need to meet, as they are happy to use decisions in writing.

A paper that sets out the possible choices. You decide which of these choices you want, then write a cross (X) next to your choice.

To put one of your hands high into the air above your head.

Farmfoods Ltd is a private limited company which supplies animal food to farms for sheep, cows and other animals. The company traded successfully for the past four years. The company's most valuable … is its factory where the company manufactures the animal food. The directors decided to expand the business. Farmfoods Ltd needed to … a lot of money to … this expansion. The directors applied for a large loan from the Royal Chatsworth Bank. The bank considered the application and agreed to … the company the money. However, the bank wanted a … from Farmfoods Ltd that the company would … the loan. The bank demanded a fixed … over Farmfood Ltd's assets. The directors agreed to … a … to the bank over Farmfoods Ltd's factory. The bank now has … over the factory. If Farmfoods Ltd … on the loan repayments, the bank can take the factory from Farmfoods Ltd.

To ... money means to take money from someone else for an agreed period of time and then pay it back.

To … money means to give money to someone else for an agreed period of time. That person must then give the money back to you.

A … is a sum of money that you borrow from another person. You must pay back that money, usually with interest.

To … money is to pay back the money that you borrowed from someone.

An … is something that you own which has a value. It can have a very low value, for example a CD, or a very high value, for example a house.

To … a project means to obtain money in order to be able to pay for that project.

A … is a promise to do something.

… is a guarantee that you will pay back to someone the money that you owe to them. It is often 'fixed' to a particular asset, which means that if you don't pay back the money, that person will take the asset that you used to guarantee payment.

A … is one example of security. It is a legal document which gives a house or a building as security for a loan. If the owner of the house does not pay the loan back, then the person who lent the money can take the house and sell it in order to get his or her money back.

If someone … on payment it means that he or she fails to make that payment.

A … is a type of security. A fixed charge is attached to a particular asset and gives the chargeholder the right to take that asset if the borrower does not pay the money that it owes. An example of a fixed charge is a mortgage. There are other types of charge, which are less important than fixed charges.

To … a mortgage over your property is to use that property as security for a loan.

Unfortunately, Farmfoods Ltd experienced a very bad year … trading last year. … a period of terrible weather which ruined the crops, Farmfoods Ltd had to increase its prices … 15% and its customers found other more competitive suppliers. The company's plans … expansion did not receive approval … the planning authorities. The company cannot pay the instalments … the loan from the Royal Chatsworth Bank and last month the bank demanded full repayment … the loan. Farmfoods Ltd is insolvent. The company is unable to pay its debts.

Print It Ltd. This is a company that supplies printing services to Farmfoods Ltd. Farmfoods Ltd did not give any guarantee for payment of any amount.

Chatsworth Royal Bank. The bank has a mortgage over Farmfoods Ltd's factory to guarantee repayment of this loan.

HGFT Bank. Farmfoods Ltd also took out a loan from this bank. HGFT Bank holds a charge over some of Farmfoods Ltd's assets.

Spin Electric plc. This company provides Farmfoods Ltd with electricity. Farmfoods Ltd has not paid any of its electricity bills for five months. Farmfoods Ltd did not give any guarantee for payment of any amount.

Grotell & Co. This is a partnership that supplies packaging to Farmfoods Ltd. There are two invoices from Grotell & Co that are waiting to be paid. There is no guarantee for payment of any amount.

What does to strike off a company mean?

What does to liquidate a company mean?

What adjective describes a company which is able to pay all of its debts?

Which phrasal verb has the same meaning as to liquidate?

Who has the task of winding up a company?

What does to realise assets mean?

What is an insolvent company?

If you want to be an … you must have special qualifications which allow you to deal with the process of closing companies.

I am pleased to report that after a very difficult year of trading, this company is now … and we are in a position where we are able to pay all of our debts.

A … is a procedure where the shareholders of a solvent company decide to close the company.

When lawyers talk about closing a company they either use the verb 'to … a company or the phrasal verb "to …" a company. These verbs have the same meaning.

As Hawksend Ltd failed to respond to any letters or demands from Companies House, the Registrar is going to … Hawksend Ltd from the register of companies.

Following a terrible year of trading during which Klarx Ltd made massive losses, Klarx Ltd announced that the company is … and does not have the money to pay all of its creditors.

When a company is in liquidation, the … is the person who has to wind up

To … an asset means to sell that asset in order to raise some money.

At the end of the process of liquidating a company, the company is … and does not exist any more.

To change, to alter.

Extremely big.

To trade.

If a company cannot pay its debts when they are due, the company is insolvent. Directors have a duty not to allow a company to continue to trade when they know that the company is insolvent. The directors must decide what to do. They must consider which of the available insolvency proceedings will benefit the company. Insolvency proceedings are formal ways of dealing with the debts of the company. There are different types of company insolvency proceedings. The most common insolvency proceedings are:

A company is in administration when either the directors, a secured creditor, or a court appoints an insolvency practitioner to be the administrator of the company. The administrator takes control of the company and has to manage the company for the benefit of the creditors of the company. The aim of administration is to try to 'rescue' the company so that it can continue to trade as a going concern, or if that is not possible, to sell the company's assets for the best possible price.

A company is in receivership when a creditor, whose debt is secured by a charge over the company's assets, appoints a receiver. The receiver can sell the assets subject to the charge and use the money he or she receives to repay the creditor.

This can take place when the company cannot pay its debts. The company has to pass a resolution stating that the company cannot continue in business due to its debts. A liquidator is appointed to wind up the company. The liquidator has to realise the assets of the company and give the proceeds to the creditors. The proceeds is the money that you receive from selling something. If any money is left after payment of the creditors, the liquidator will give that money to the shareholders. At the end of the liquidation process, the Registrar at Companies House dissolves the company.

This takes place when a creditor presents a winding-up petition to the court, on the grounds that the company cannot pay its debts, and the court makes an order for the company to be wound up. Following the order, the Official Receiver becomes the liquidator of the company. At the end of the liquidation, the company is dissolved.

If a debt is … it means that it is time for you to pay that debt now.

If a company is unable to pay its debts, in the UK we say the company is … In the. USA they say that the company is bankrupt.

… is the state of not being able to pay your debts.

A lawyer who specialises in insolvency can advise which of the available insolvency … would be the best to use in a particular situation.

The person who has the power to run a company which is in administration is called the … This person must be a qualified insolvency practitioner.

To … a company means to run a company.

If you do something for the … of someone, this means that you act in that person's best interests to get the best result for him or her.

A … is a business that is actively trading.

A … is an amount of money that you owe to someone.

A … owes to someone. is a form of security to ensure that a company or person repays money which it

A … is the person who must take control of a company's assets and try to recover enough money to pay back a particular secured creditor.

In this context, the expression … means 'covered by'.

If a company makes a formal decision at a company meeting, it passes a …

The phrasal verb to … a company means to formally close the company.

To … assets means to sell assets in order to obtain money.

A formal way of referring to the money that you get from selling something is to say the … of sale'.

When a person … a document he or she officially gives that document to someone or files the document in a particular place.

A … is a document that starts the process of liquidation. It is a request made to the court to liquidate a company.

A formal way of saying 'for the reason that' is to say 'on the … that'.

If a company is in compulsory liquidation, the … becomes the liquidator of the company.