The Language of Company Law 9B

The people who run and manage a company.

The owners of a company. They are also called the members of a company.

The person who is responsible for making sure that a company's statutory obligations are complied with.

A person who checks the financial records of a company to verify that the accounts are a true reflection of the company's financial position.

A person who deals with a company's finances. This person usually has professional qualifications in accountancy.

All of the people who are employed by a company.

The people or companies that a company owes money to.

The people or companies who owe a company some money.

'My name is Louise Nichols. I own 40% of the issued shares in Sanders & Nichols Ltd. The other … are Dennis Sanders and Kit Neilson. As well as being members of the company, we are responsible for running the company, as we are the … of the company. Kit Neilson has an additional responsibility as he is the ... He has to make sure that all the legal requirements in connection with filing documents at Companies House are complied with.

We have three … who work in our shop in Chatsworth. We use the services of an … to keep our financial records up-to-date. We have regular meetings with her and each month we look at the list of people who haven't paid our invoices. Of these … we look to see if there is a good reason why they haven't paid us. If there is no reason, we contact them to ask them to pay us immediately. In the same way, we look at the people that we owe money to. These are our … We pay most of these, but if we have a query we will raise that with them. Once a year it is necessary for an … to check the financial records and accounts of our company. This is an independent check, to make sure that our annual accounts show the true financial position of Sanders & Nichols Ltd."

'I have always wanted to work in the area of company law because it is so interesting and there is so much variety. You have to deal with non-contentious work, such as … a new company, and contentious work, such as acting for a company which is in … with its suppliers. We work closely with the other departments within the law firm. For example, if a company needs a service agreement for a new director, we will ask the … department for assistance. If the matter involves a company which is experiencing financial difficulties, we will ask for advice from one of our lawyers in the banking and … department. If we are dealing with a situation where one company is taking over another company, then we will involve a tax lawyer.

I have been with this firm for 14 years and in that time I have dealt many aspects of company law. These include:

• Dealing with company … and restructuring a company

• Drawing up and advising on shareholders' agreements

• Drafting directors' service agreements

• Advising on methods of … finance

• Giving advice on complying with new legislation

• Dealing with mergers and …

• Giving advice on voting procedures at meetings and drafting …

• Advising on company insolvency procedures

• Dealing with joint ventures.

So as you see, company law is a huge area of law, with many varied aspects. Some of the law regulating companies is … and some comes from the common law. In 2006 a new Act of Parliament was passed, called the Companies Act 2006. This new legislation affects existing and new companies and all company lawyers have a lot of work to do in becoming familiar with the legislation and advising their corporate clients on complying with it.'

'A new statute has been passed which will fully come into force in 2008. This will have a huge effect on company law and we must make sure that our clients are aware of the changes in the law and how it affects their company.'

'If a company needs money, there are a number of ways the company can obtain it. However, it is important to consider both the short-term and long-term effects of each option and choose the one that best suits the purpose and needs of the company.'

You have instructed me in connection with the sale of your shares in Happy Times Ltd children's nursery. I need to see a copy of the contract that you signed, which deals with the arrangements between all the members of Happy Times Ltd.'

'During the lifetime of a company, many decisions will be made and lots of formalities must be followed when taking those decisions.'

'You would like to appoint Janice Longman as your new Financial Director and you have instructed me to draw up a document clearly setting out the terms and conditions of this appointment.'

'Sadly, many companies do not succeed in trading profitably and they make substantial losses. Some of these companies have to close down, others may benefit from an experienced person taking control of the company. There are a number of ways to help a company which is in financial difficulties.'

'I am often involved in situations where two companies are joining together or where one company wants to gain control of another company.'

‘At the moment I am working on a project which involves two independent companies working closely together on a particular project for a specified period of time.'

‘It is very important, when setting up a new company or changing the structure of an existing company, to think about the consequences, both in terms of finance and the balance of power between the shareholders.’

To work …

To … difficulties

To … finance

A … effect

To … a decision

To … a decision

To be … dispute with someone

To advise … something

… connection … something

To succeed … doing something

To work … a project

To think … something

To be familiar … something

To formally choose someone for a particular job or position.

To be in the position of a director and to perform the duties required by that position.

To dismiss a director from his or her job or position.

Regarded as belonging to a particular group.

To have become used to something.

To use, to put something into effect.

Dishonestly or illegally.

The state of being stopped from being in a particular job, or from taking part in a particular activity.

'We're thinking about setting up a private limited company. How many directors must we have?'

'Our company is unhappy with one of our directors and we want to fire him. Will the company have to pay him any money?'

'My father is a director of a company. He doesn't make decisions for the company, or have any say in the running of the company, but he does give advice. He's more like a consultant, really. What sort of director is he, and does he have any legal responsibilities to the company?'

'I've got a friend called Fred. He isn't officially a director of a company, but he tells the official directors what to do and basically he's the person that runs the company. Is he a sort of director?'

'Can you please explain again what fiduciary duty means?'

To … a director

To … a director

… faith

To act …

To … a dividend

To give … to

A … of interest

To … advice

To have … least a particular number

To appoint someone … a director

To be satisfied/dissatisfied … something

To be classed … something

To act … the interests … someone

To lead … something

To be disqualified … something

To act … good faith

The two main types of company meeting are the annual general meeting and the … general meeting. These meetings are often referred to by their abbreviations, AGM and EGM. In general English, we use the expression 'to … a meeting'. In legal English, we use a more formal expression, which has the same meaning. Lawyers say to hold a meeting or to … a meeting.

Any meeting which is not an AGM is an EGM. An EGM can take place any number of times. Until 2007, every company had to convene an AGM every calendar year. This is still true for public limited companies. However, following the introduction of the Companies Act 2006, private limited companies are no longer obliged to hold an AGM. The purpose of the AGM is to consider the accounts and reports of the auditors and directors, to declare any dividends and to … new directors or auditors.

The rules on voting at a meeting are found in a company's articles of association. Voting at company meetings is usually by a … having one vote. The other method of voting is by a … of hands, with each member In this case, a written record is kept and each member has a vote for every share that he or she holds.

A … is a decision made by the directors or shareholders of a company. In general English we talk about making a decision or … legal English we say to … a decision. In a resolution or to carry a resolution.

A … resolution is called a motion. If the necessary majority is not obtained, then the motion fails. If the necessary majority is obtained, the resolution is passed. If everyone present at the meeting agrees to the resolution, it is passed … When a resolution is passed the company is bound by it. This means that all the shareholders and the company must abide by the terms of the resolution.

If a member is not able to attend a meeting in person, he or she can appoint a … to attend and vote on his or her behalf.

The annual general meeting of the Company will be … at The Burlington Hotel, The Parade, Chatsworth, CH1 5JM on 18 July 20XX at 2.00pm for the following purposes:

1. To receive the report of the directors and the audited … for the year ended 31 March 20XX.

2. To re-appoint AB Chartry & Co as …

3. To authorise the … to fix the remuneration of the auditors.

By order of the Board.

Secretary

Date: 21 May 20XX

… office: 5 East Side, Blagfields Industrial Estate, Chatsworth, CH8 7HN

Note:

A … entitled to attend and vote at the meeting is entitled to appoint a … to attend and, on a … vote instead of him. A proxy need not be a member of the Company

To … a meeting

To … a resolution

To … a quorum

To … a meeting

To … a resolution

A … majority

To … a decision

To … a majority

To … the minutes

To … a decision

To … a proxy

To … a meeting

To have a meeting … someone

The rules … something

A show … hands

To attend … person

To vote … proxy

To give notice … something

To vote … favour … something

To take the minutes … a meeting

This is when the shareholders of a company decide to close the company and there are enough assets to pay all the debts of the company.

This is when the shareholders of a company decide that they must close the company, because there are not enough assets to pay all the debts of the company.

This is an order made by a court for a company to be closed.

This is an order made by a court that gives a company some time to try to resolve its financial difficulties or sell its assets in order to pay its creditors.

This is a person who supervises companies which are in administration. This person has passed special examinations to become an authorised insolvency practitioner.

This is a person who supervises the closing of a company which is in liquidation.

This is a person who is appointed by a creditor of a company to take control of that company in order to sell its assets and pay the money it owes to that creditor.

This person is a government official who is appointed to close a company which is in financial difficulties.

The type or category of something.

An abbreviation that means 'insolvency practitioner'.

An abbreviation that means 'number'.

An abbreviation that means 'care of'.

A formal application made to a court to request a specific legal action. Here, the action asked for is to put a company into liquidation.

An old-fashioned word that means the things that belong to someone.

A formal phrasal verb that means to give to someone.

I am writing in connection with Groves Ltd, which is … administration.

I am writing to notify you that Justex pic has been placed … administration.

It was announced yesterday that Beans Ltd has gone … liquidation.

I am acting for the creditors of a company called Larkson Ltd, which is … receivership.

Sound Music Ltd went … compulsory liquidation last year following a series of bad decisions taken by the directors.

The members of Highfold Ltd have decided to put the company … liquidation.

The effect of the liquidation of a company is to … that company from trading as a commercial entity. The liquidator has to … all the company's assets and then … The aim is to … them. as much money as possible. This process is called realisation of the assets. The proceeds of the sale of the assets are then used to … as many people as possible who are entitled to this money. It is often the case that not everyone will get the money that they are owed. The liquidator pays people in a particular order of priority.

This order of priority is:

• the costs of winding-up (including the liquidator's own fees and expenses)

• creditors with fixed charges

• preferential creditors (for example, wages and salaries owed to employees, and money due to the government in respect of tax)

• other secured creditors

• unsecured creditors

• interest on debts

• shareholders

When the winding-up is complete, the company is dissolved and it does not … any longer as a legal entity.

These are the people who own the company.

These are people or other companies who the company which is in liquidation owes money to, usually because the company borrowed money from them. These people or companies took security (for example, a mortgage) from the company which is in liquidation to guarantee repayment of the loan. This security was secured against the fixed assets owned by the company, for example real estate or machinery.

This is the amount of money that you have to pay as a fee or a sort of penalty for money that you owe to someone. It is usually expressed as a percentage.

This includes the liquidator's fees and expenses as well as any legal costs.

These are people or other companies who the company which is in liquidation owes money to. However, these people or companies did not take any security from the company which is in liquidation to guarantee payment of the money.

These include people who are owed money by the company which is in liquidation and who are considered to have priority over other creditors, even though they have no security to guarantee payment. It includes money due to the government in respect of tax, and wages owed to employees.

These are people or other companies who the company which is in liquidation owes money to. These people or companies took some sort of security from the company which is in liquidation to guarantee payment of the money. However, the security was not secured against the fixed assets owned by the company.

To … into liquidation/receivership/administration

To … in liquidation/receivership/administration

To …/… a company into liquidation/receivership/administration

To … a petition

To … assets

…/… creditors

To … a company

To go … liquidation/receivership/administration

The proceeds … sale

To be … liquidation/receivership/administration

We are … a meeting, which will be held on 5 October.

At the company meeting the members … a resolution to change the name of the company to Jedexpress Ltd.

We need to look at ways of … finance, as we need more money if we want to go ahead with this project.

The creditors presented a … requesting that the company be wound up.

The chairperson asked me to … the minutes of the meeting.

The shareholders no longer want Mr Fox as a director of the company. They think that Mr Fox is not performing his duties properly. They will discuss the motion to … this director at the meeting next week.

I am unable to attend the meeting next week, so I have … a proxy to go to the meeting and vote on my behalf.

I am sorry but we will have to … this meeting to Monday of next week.

Kingsford Electronics Ltd was … into administration last week.

The Official Receiver is the liquidator and he is in charge of … the assets of the company. That means he must sell the assets and use the money from the sale to pay the creditors.

A proposal which is being discussed at a meeting is called a …

The … of a meeting provide the details of what happened at that meeting.

The … of sale of something means the money that you get when you sell that thing.

Can the meeting go ahead? How many people are here? Do we have a … present?

The … are coming next week to check the financial records of the company. You will need to be here in case they have any questions.

One of the methods of voting at a company is by way of a written vote. This is called a …

This person has not been appointed as a director. However, he is the person who tells everyone what to do. He is known as a … director.

A situation in which two companies decide to join together permanently is a …

A formal word for the purchase of a company is an …, Informally, people often refer to it as a takeover.

Directors who are closely involved in the decision-making of a company are known as … directors.

After six years of trading, Baxters Ltd went … liquidation.

Caroline Thomson has been disqualified … being a director of any company for five years.

We need … least five shareholders to attend the meeting in order to form a quorum.

I can't attend the meeting … person, so I will vote by proxy.

I am a lawyer in the corporate department. At the moment I am advising … a new joint venture project.

We will need to arrange a meeting … a tax specialist soon.

Directors have a duty to act … the best interests of the company.

How many people are … favour of this deal?

Well done everyone. Our client will be extremely satisfied …  the outcome of the negotiation.

This action may lead … a claim being made by our suppliers.

Each year, our company's financial records are checked by an independent accountant called an …

Directors have to act in the best interests of the company as a whole. This is known as their … duty.

At the extraordinary general meeting last week, the shareholders … a resolution to change the company's name.

There was no quorum present, so the meeting was … It will take place on 14 October.

Following his failure to submit the company's annual return to Companies House or respond to any letters, he was finally … from being a director for two years.

The directors and shareholders agreed that the company was making huge losses and they had no other choice but to put the company into …

The shareholders voted to … William Ashby as a new company director for a fixed term of five years.

Jane Abbots formally declared that she had a personal interest in the transaction that was being discussed, which may … with the interests of the company. She did not vote on that transaction.

An … director is actively involved with the day-to-day decision making of the company.

There is a lot of work in the mergers and … department at the moment. I am currently acting for a corporate client which is buying all the shares in another company.

 After payment of the secured creditors, the liquidator must pay the … creditors, for example any tax owed to the government.

1. The Chairman announced that … to the Meeting being held at short notice had been received from all the members of the Company having a right to attend and … at the Meeting.

2. The Chairman announced that a … was present.

3. The Chairman … the resolution in the notice. The Chairman put the resolution to the meeting, took the vote on a … the resolution … of hands and declared unanimously as an ordinary resolution of the Company.

4. There being no further business the meeting terminated.