Butterworths Corporate Law Service
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Commentary
Butterworths Corporate Law Service (BCLS) adopts a practical approach to all aspects of corporate law, including company law, company administration, corporate finance, and corporate transactions, giving a narrative explanation of the law along with practical examples, useful checklists, procedural tables and specimen model accounts.
IMPORTANT NOTE:
Insolvency, Parts A–G
The focus of Butterworths Corporate Law Service is matters pertaining to the formation, management and financing of companies and the core transactions commonly undertaken by them, such as joint ventures and takeovers.
Over recent years, insolvency law has developed into a very significant and specialised body of law which it is no longer possible, or appropriate, to address in any substantive way in a company law work. For that reason, the
material included in the Insolvency Binders of this work is no longer part of the Corporate Law Service. Rather, where insolvency impacts on company law matters, such as directors’ duties, it is addressed in that context. For practical guidance and a comprehensive discussion of insolvency law, please refer to our specialist text, Tolley’s Insolvency Law Service.
The precedents from this title are available in BCLS Corporate Precedents
SOURCE CURRENCY
Issue 81, April 2013
UPDATE INFORMATION
The following chapters have been updated:
Company Law
Chapter 1 Types of business medium
Chapter 1 clarifies a number of areas, including the Share Incentive Scheme.
Chapter 2 Formation and registration of a private company
Chapter 2 covers the recent recommendations by the Office of Tax Simplification.
Chapter 3 Formation and registration of a public company
Chapter 3 contains minor amendments.
Chapter 4 Company and business names; adoption and publication
Chapter 4 contains minor amendments.
Chapter 6 Overseas companies - registration of an establishment
Chapter 6 contains minor amendments.
Chapter 8 Corporate personality
Chapter 8 has been updated to reflect the important recent decisions on piercing the corporate veil; the Court of Appeal decision in Prest v Prest [2013] 1 All ER 795 (as to whether the assets of a company owned or controlled by a husband can be treated as his assets for the purposes of property orders in divorce proceedings) – that decision has been appealed to the Supreme Court, sub nom Petrodel ResourcesLtd v Prest, and a ruling is expected by summer 2013; and the Supreme Court ruling in VTB Capital plc v Nutritek International [2013] 1 BCLC 179 (as to whether the corporate veil can be pierced to render the puppeteers liable on the puppet company’s contracts
Chapter 13 The company in litigation
Chapter 13 has been updated to reflect recent decisions, Smith v Butler [2012] EWCA Civ 314 on the implied authority of a managing director; Merchantbridge v Safron GP [2012] 2 BCLC 291 on the power of the court to make non–party costs orders; and Peaktone v Joddrell [2013] 1 All ER 13, CA, on the effect of restoration of a dissolved company to the register.
Chapter 15 The issue and allotment of shares
Chapter 15 contains minor textual amendments reflecting the abolition of the FSA, which has now been superseded by the FCA.
Chapter 18 Classes of shares and variation of class rights
Chapter 18 contains minor textual amendments reflecting the abolition of the FSA, which has now been superseded by the FCA.
Chapter 19 Dividends and distributions
Chapter 19 contains a number of minor amendments.
Chapter 20 Members
Chapter 20 contains minor textual amendments reflecting the abolition of the FSA, which has now been superseded by the FCA.
Chapter 24 The duty of care, skill and diligence
Chapter 24 has been amended to reflect the abolition of the FSA and the Court of Appeal’s decision inWeavering Capital (UK) Ltd & Ors v Dabhia & Anor [2013] EWCA Civ 71 (15 February 2013).
Chapter 28 Derivative and personal claims
Chapter 28 has been updated to reflect two important decisions at first instance on derivative claims: Bamford v Harvey [2012] EWHC 2858 (as to whether there is a still a requirement to show wrongdoer control in order to get permission to bring a derivative claim) and Re Fort Gilkicker [2013] EWHC 348 (as to whether this jurisdiction permits so-called multiple derivative claims by a member of a parent company where the wrongdoing has occurred in a subsidiary company). The important decision in Jackson v Dear [2013] EWCA Civ 89 is also noted, as to whether a term should be implied into a shareholders’ agreement preventing those shareholders in their capacity as directors from exercising certain powers conferred on directors by the articles.
Corporate Administration: Corporate Finance
Chapter 1 Meetings of members
Chapter 1 contains minor amendments.
Chapter 2 Meetings of directors
Chapter 2 contains minor amendments.
Chapter 3 Secretaries
Chapter 3 contains minor amendments.
Chapter 4 Statutory books and records
Chapter 4 contains minor amendments
Chapter 6 Publicity
Chapter 6 contains minor amendments.
Chapter 9 The preparation of company accounts
Chapter 9 has been updated to incorporate details of an FRC consultation on proposals for implementing a number of the recommendations from the recent Sharman Inquiry into going concern and liquidity risks (see CAF[9.72E]). The consultation paper includes a draft version of new FRC ‘Guidance on Going Concern 2013’. This is intended to be effective for reporting periods beginning on or after 1 October 2012 and the FRC hopes to issue the guidance in final form by 30 June 2013. The consultation paper also proposes certain changes to auditing standards to increase communication on going concern issues by auditors of companies that report under the UK Corporate Governance Code.
Chapter 11 Special category companies and groups
Chapter 11 has been updated for a new BIS consultation document on the options for incorporating into UK company law the exemptions now available to Member States under the EU Micros Directive (see CAF[11.42C]). The Government considers that there would be benefits in taking advantage of the option to reduce reporting requirements for these businesses and plans to implement the changes as soon as possible.
Chapter 13 Auditors
Chapter 13 has been updated for the following recent developments:
the FRC consultation on proposals for implementing a number of the recommendations from the recent Sharman Inquiry into going concern and liquidity risks and related changes to auditing standards, and further FRC proposals for changes to auditor reporting, all of which are intended to apply for reporting periods beginning on or after 1 October 2012 (see CAF[13.137]–[13.141]); and
the provisional conclusions from the Competition Commission review of potential competition issues within the audit market and the remedies put forward for consideration (see CAF[13.32C]).
Chapter 25 Company accounts
Precedent 4 (Accounting Standards and related pronouncements) and Precedent 4A (Auditing Standards and related pronouncements) have been updated to reflect documents in issue as at 1 March 2013.
Corporate Transactions
Chapter 2 Preparations for sale (due diligence etc)
Chapter 2 clarifies when stamp duty land tax (SDLT) of up to 4 per cent kicks in. It also briefly updates the section on EMIs and entrepreneurs’ relief.
Chapter 3 Sale of shares or business
Chapter 3 contains a minor update on the new entrepreneurs' relief for EMIs.
Chapter 5 Share sale agreement
Chapter 5 has been very briefly updated.
Chapter 8 Market abuse and insider dealing
Chapter 8 update discusses the Financial Conduct Authority (FCA) which replaced the FSA as the UK financial services regulator responsible for the conduct of all firms that were regulated by the FSA, as of April 2013.
Tables and Index
Supplementary tables and index
IMPORTANT NOTE:
Insolvency, Parts A–G
The focus of Butterworths Corporate Law Service is matters pertaining to the formation, management and financing of companies and the core transactions commonly undertaken by them, such as joint ventures and takeovers.
Over recent years, insolvency law has developed into a very significant and specialised body of law which it is no longer possible, or appropriate, to address in any substantive way in a company law work. For that reason, the
material included in the Insolvency Binders of this work is no longer part of the Corporate Law Service. Rather, where insolvency impacts on company law matters, such as directors’ duties, it is addressed in that context. For practical guidance and a comprehensive discussion of insolvency law, please refer to our specialist text, Tolley’s Insolvency Law Service.
The precedents from this title are available in BCLS Corporate Precedents
SOURCE CURRENCY
Issue 81, April 2013
UPDATE INFORMATION
The following chapters have been updated:
Company Law
Chapter 1 Types of business medium
Chapter 1 clarifies a number of areas, including the Share Incentive Scheme.
Chapter 2 Formation and registration of a private company
Chapter 2 covers the recent recommendations by the Office of Tax Simplification.
Chapter 3 Formation and registration of a public company
Chapter 3 contains minor amendments.
Chapter 4 Company and business names; adoption and publication
Chapter 4 contains minor amendments.
Chapter 6 Overseas companies - registration of an establishment
Chapter 6 contains minor amendments.
Chapter 8 Corporate personality
Chapter 8 has been updated to reflect the important recent decisions on piercing the corporate veil; the Court of Appeal decision in Prest v Prest [2013] 1 All ER 795 (as to whether the assets of a company owned or controlled by a husband can be treated as his assets for the purposes of property orders in divorce proceedings) – that decision has been appealed to the Supreme Court, sub nom Petrodel ResourcesLtd v Prest, and a ruling is expected by summer 2013; and the Supreme Court ruling in VTB Capital plc v Nutritek International [2013] 1 BCLC 179 (as to whether the corporate veil can be pierced to render the puppeteers liable on the puppet company’s contracts
Chapter 13 The company in litigation
Chapter 13 has been updated to reflect recent decisions, Smith v Butler [2012] EWCA Civ 314 on the implied authority of a managing director; Merchantbridge v Safron GP [2012] 2 BCLC 291 on the power of the court to make non–party costs orders; and Peaktone v Joddrell [2013] 1 All ER 13, CA, on the effect of restoration of a dissolved company to the register.
Chapter 15 The issue and allotment of shares
Chapter 15 contains minor textual amendments reflecting the abolition of the FSA, which has now been superseded by the FCA.
Chapter 18 Classes of shares and variation of class rights
Chapter 18 contains minor textual amendments reflecting the abolition of the FSA, which has now been superseded by the FCA.
Chapter 19 Dividends and distributions
Chapter 19 contains a number of minor amendments.
Chapter 20 Members
Chapter 20 contains minor textual amendments reflecting the abolition of the FSA, which has now been superseded by the FCA.
Chapter 24 The duty of care, skill and diligence
Chapter 24 has been amended to reflect the abolition of the FSA and the Court of Appeal’s decision in
Chapter 28 Derivative and personal claims
Chapter 28 has been updated to reflect two important decisions at first instance on derivative claims: Bamford v Harvey [2012] EWHC 2858 (as to whether there is a still a requirement to show wrongdoer control in order to get permission to bring a derivative claim) and Re Fort Gilkicker [2013] EWHC 348 (as to whether this jurisdiction permits so-called multiple derivative claims by a member of a parent company where the wrongdoing has occurred in a subsidiary company). The important decision in Jackson v Dear [2013] EWCA Civ 89 is also noted, as to whether a term should be implied into a shareholders’ agreement preventing those shareholders in their capacity as directors from exercising certain powers conferred on directors by the articles.
Corporate Administration: Corporate Finance
Chapter 1 Meetings of members
Chapter 1 contains minor amendments.
Chapter 2 Meetings of directors
Chapter 2 contains minor amendments.
Chapter 3 Secretaries
Chapter 3 contains minor amendments.
Chapter 4 Statutory books and records
Chapter 4 contains minor amendments
Chapter 6 Publicity
Chapter 6 contains minor amendments.
Chapter 9 The preparation of company accounts
Chapter 9 has been updated to incorporate details of an FRC consultation on proposals for implementing a number of the recommendations from the recent Sharman Inquiry into going concern and liquidity risks (see CAF[9.72E]). The consultation paper includes a draft version of new FRC ‘Guidance on Going Concern 2013’. This is intended to be effective for reporting periods beginning on or after 1 October 2012 and the FRC hopes to issue the guidance in final form by 30 June 2013. The consultation paper also proposes certain changes to auditing standards to increase communication on going concern issues by auditors of companies that report under the UK Corporate Governance Code.
Chapter 11 Special category companies and groups
Chapter 11 has been updated for a new BIS consultation document on the options for incorporating into UK company law the exemptions now available to Member States under the EU Micros Directive (see CAF[11.42C]). The Government considers that there would be benefits in taking advantage of the option to reduce reporting requirements for these businesses and plans to implement the changes as soon as possible.
Chapter 13 Auditors
Chapter 13 has been updated for the following recent developments:
Chapter 25 Company accounts
Precedent 4 (Accounting Standards and related pronouncements) and Precedent 4A (Auditing Standards and related pronouncements) have been updated to reflect documents in issue as at 1 March 2013.
Corporate Transactions
Chapter 2 Preparations for sale (due diligence etc)
Chapter 2 clarifies when stamp duty land tax (SDLT) of up to 4 per cent kicks in. It also briefly updates the section on EMIs and entrepreneurs’ relief.
Chapter 3 Sale of shares or business
Chapter 3 contains a minor update on the new entrepreneurs' relief for EMIs.
Chapter 5 Share sale agreement
Chapter 5 has been very briefly updated.
Chapter 8 Market abuse and insider dealing
Chapter 8 update discusses the Financial Conduct Authority (FCA) which replaced the FSA as the UK financial services regulator responsible for the conduct of all firms that were regulated by the FSA, as of April 2013.
Tables and Index
Supplementary tables and index
Contributors
| Adam Duthie BeC, LLB (ANU), BCL (Oxon), Head of European Commercial Group, Withers LLP | Editor |
| Anthony Turner Partner, Farrer & Co | Editor |
| Brenda Hannigan MA (TCD), LLM (Harv), Solicitor (Ireland), Professor of Corporate Law, University of Southampton | Consultant editor |
| Colin Smith BA (Hons), MA (Lond), Withers LLP | Editor |
| Glynis D Morris BA, FCA, Chartered Accountant | Editor |
| Harvey Knight BA (Oxon), Withers LLP | Editor |
| James Mather Barrister, Serle Court Chambers | Editor |
| Jason Fisher Pinsent Masons LLP | Editor |
| Martha Bruce FCIS, Partner, David Venus & Company | Editor |
| Matthew Morrison Barrister, Serle Court Chambers | Editor |
| Nicole Livesey Senior Associate, Pinsent Masons LLP | Editor |
| Nigel Banerjee Professional Support Lawyer, Hogan Lovells International LLP | Editor |
| Paul Marshall BA (Cantab), 4-5 Gray's Inn Square | Editor |
| Professor Mark Watson-Gandy 13 Old Square Chambers | Editor |
| Saima Hanif BA (Oxon), 4-5 Gray's Inn Square | Editor |
| Simon Graham Consultant, Wragge & Co LLP | Editor |
| Simon Howley MA (Oxon), Professional Support Lawyer, CMS Cameron McKenna LLP | Editor |
