Company Management Glossary

Company Management Glossary

The annual anniversary upon which a limited company’s financial year ends.

The period which ends on the accounting reference date.

The order of a court to appoint an administrator to manage a limited company in financial difficulties in an attempt to secure its survival or winding up.

A written statement of facts made on oath and signed in the presence of an authorised person (e.g. solicitor). Used as evidence.

The appropriation of shares in the capital of the limited company to the applicants for those shares, by the board.

Annual General Meetings (AGMs) are no longer obligatory, but are still a good idea. Annual meetings of a limited company’s shareholders to lay the annual accounts and directors’ and auditors’ reports before the shareholders and deal with other matters. Private limited companies can dispense with the need for AGMs by passing resolutions.

A prescribed form which must be filed annually with Companies House by a limited company, detailing the limited company’s activities for the period up to the anniversary of the limited company’s incorporation.

Articles of Association is the document containing the limited company’s regulations for its internal management.

Anything owned with monetary value. This includes both real and personal property.

A person appointed to examine the accounts of a registered company and to report on them to company members.

This was the nominal capital which the limited company was authorised to issue by its Memorandum of Association. The concept of authorised capital has been abolished by the Companies Act 2006.

The directors of a limited company.

A meeting of the limited company directors.

Written limited company records of formal proceedings of shareholders’ and directors’ meetings.

Decision made by limited company directors or shareholders in accordance with requisite majorities set out in the Articles of Association. Limited company resolutions may be approved in meetings or by written resolution.

A limited company may execute deeds by affixing its seal to them. There is no longer any requirement for a limited company to have a seal and it may execute deeds by either two directors or a director and the company secretary signing the relevant document.

An officer of the limited company who manages company business and has a duty of care, skill and good faith.

A company resolution which a private limited company was entitled to pass to reduce or remove certain administrative or formal requirements. It required the consent of all those shareholders entitled to vote. These no longer apply since the introduction of the Companies Act 2006.

Extraordinary General Meetings (EGMs) are now simply called ‘general meetings’. They were any meeting of limited company members other than the Annual General Meeting (AGM).

Extraordinary resolutions no longer apply. Any company resolution that was ‘extraordinary’ is now regarded as a ‘special resolution’. A company resolution required to effect decisions in certain circumstances (e.g. a creditors’ winding up) and which requires a majority of not less than 75 per cent of the company members voting in person or by proxy at a general meeting.

A meeting of limited company shareholders. It may be an Annual General Meeting (AGM) or general meeting where shareholders give their approval for transactions.

To form a limited company by following procedures prescribed by law. On incorporation the limited company becomes a separate legal entity distinct from its owners.

The inability of a company to meet its debts as they become due.

Shares which have been actually allotted by the limited company and in respect of which the allottees have been entered in the limited company’s register of members.

A person whose name has been entered in the limited company’s register of members in respect of the shares they hold in the limited company.

The Memorandum of Association is the limited company’s charter enabling the outsider to establish the extent of the limited company’s powers.

Regulations published by the government for the management of a limited company.

The amount of share capital that a limited company is allowed to issue. When the limited company is incorporated, this is stated in its Memorandum of Association. For example, "£100 divided into 100 shares of £1 each". The shares are then said to have a nominal, or "par", value of £1 each and, if the limited company wants to issue more than 100 of them, it must pass a company resolution to increase its capital.

A decision reached by a simple majority (more than 50 per cent) of limited company members voting in person or by proxy.

Ascertaining the will of the shareholders at a general meeting of the limited company by counting shareholders’ votes according to the size of their shareholdings.

The rights of existing shareholders granting them first option to acquire shares which are to be transferred or issued in proportion to their present shareholding.

Authorisation by a shareholder allowing another to vote on his behalf.

A type of limited company incorporated by registration under the Companies Act which may offer its shares to the public (a private company cannot do this) and is subject to a number of additional requirements under the Companies Act.

The number of shareholders or limited company directors necessary for a vote in a valid meeting.

The postal address of the limited company notified to Companies House.

Payment for services.

A business that sells a service or advice instead of a tangible product.

Written and executed instrument showing who holds title to a particular share or series of shares.

A holder of one or more shares in the capital of a limited company.

A decision reached by not less than 75 per cent of limited company members voting in person or by proxy at a general meeting.

The records that a limited company must keep as required by law. Changes must in many cases be notified to Companies House. The records should be kept at the limited company’s registered office and be available to the public for inspection.

A person who signs the Memorandum of Association and is issued the first shares in a new limited company.

For limited companies incorporated before 1 October 2009 these were the Model Articles. These have been replaced by Model Articles (see above).

Arranging the affairs of, and then dissolving, a company.

A company resolution passed by either the shareholders or the directors of the limited company by signing a written form of the company resolution rather than voting at a meeting of the limited company or at a meeting of the directors of the limited company.

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