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mencey
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Joined: August 12th, 2002, 11:02 am

Question about UK company/corporate law

August 16th, 2007, 11:57 pm

I would greatly appreciate some insight about UK corp law.I am very familiar with continental law but got a little bit lost with the uk system. What pieces of legislation regulates company law in the UK?. Where I can find shareholders rights, can a shareholder call for a general meeting? what are the duties of directors and how can you prosecute them for fraud?Thanks in advance for your help
 
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thomssi
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Joined: August 25th, 2005, 2:45 am

Question about UK company/corporate law

August 17th, 2007, 3:10 am

Companies act, 85, 88 and 2006.This is a starthttp://www.bytestart.co.uk/content/legal/35_2/ ... ies.shtmlI think shareholders can force an EGM but need a certain % (10% I think).
 
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mencey
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Question about UK company/corporate law

August 17th, 2007, 9:30 am

Thanks , that what I though, got over 20% so I shall have quorum
 
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mencey
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Joined: August 12th, 2002, 11:02 am

Question about UK company/corporate law

August 17th, 2007, 9:34 am

Another quick question, imagine company is making a capital call, but it has a large debt with me as shareholder for unpaid expenses. May I meet the capital call with conversion of debt to equity or it shall be met in cash? (Especially because I know of directors are in breach of their duty, however I am a minority shareholder (33% - co founding partner, there is another 2 partners/directors) and cannot take them away,although I am considering suiting them.
 
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thomssi
Posts: 224
Joined: August 25th, 2005, 2:45 am

Question about UK company/corporate law

August 18th, 2007, 3:27 am

Not sure to be honest, I'm a chartered accountant and studied basic company law in that but it was over 10 years ago. You really need a lawyer. I'll tell you what I think I can remember though.There are some specific rules preventing ripping off minorities which may be of use to you. If the directors are in breach of their fiduciary duties then you can sue, removing them as directors may be difficult. Also suing may not be all that easy, you may (getting rusty here) need to sue on behalf of the shareholders as a body rather than as an individual, since it sounds like the other shareholders won't be very interested in this then if that is the case you have a problem (again you need expert advie here, you may well have a case as an individual shareholder, at least under the minority rights stuff)In terms of forcing a debt to equity swap I doubt it. When new equity is issued typically all existing holders have to be offered the same opportunity to ensure you can't forcibly dilute shareholding of some individuals (exactly what you want to do I think). The company's articles of incorporation may say something about it but probably not (there are some other docs needed when co. is set up as well but these are generally standard).Sorry I can't be more helpful.
 
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DominicConnor
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Joined: July 14th, 2002, 3:00 am

Question about UK company/corporate law

August 19th, 2007, 6:21 pm

The thing you need to read first are the articles of association for that company. These define the rules by which meetings may be called, how many for a quorum, etc.Mencey says the directors are in breach of their duty.Maybe, but you need to be clear what their "duties" are.As directors, their first duty is to the company, not the shareholders or those to whom it owes money.Often these are the same, but not always, and merecy may be seeing this.They also have various general duties, like not trading whilst insolvent, and complying with various regulations.
 
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mencey
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Joined: August 12th, 2002, 11:02 am

Question about UK company/corporate law

August 21st, 2007, 11:07 pm

Thanks for the hints, They are in breach of their fiduciary duties, they have conflict of interest and they have behaved with deceitful intentions and not with reasonable care, skill and diligence, etc.... they also breach their duty to promote the success of the company. Basically we create a separate company for developing certain renewable energy projects, we had several valuable contracts and these guys screwed up. They even tried to act as financial advisers to some M&A transactions without being registered with the FSA.The whole situation is not really such a worthwhile, and i do not plan to take over or similar but probably to force liquidation and ask for damages and some unpaid expenses as the directors shall be personally liable. To be honest is more a pain in the ass and the reputation damaged it created
Last edited by mencey on August 21st, 2007, 10:00 pm, edited 1 time in total.
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