The Practical side of running a Company
When you become a Director of a newly formed company you are often advised of your legal responsibilities and duties under the Companies Acts. However often the practical, simple things are not explained to you. Ensuring your company filings are up to date, making sure meetings are documented correctly, ensuring correct notice is given; Companies often fail to realise how crucial these "little things" are. Failures will cause unnecessary headaches, delays and stress later on especially where a company is trying to raise capital though investment. Good procedures from the outset will always pay off.
The practicalities – what do you need to know?
Company Statutory Books
These must be kept up to date and kept up in line with the Companies Registration Office (CRO) register. Any change to directorships, allotments of new shares, change of registered office etc must be recorded not only in your own Company Books but also must be filed with the CRO within 15 days of the appropriate resolution given effect to the change being passed. Please ensure your CRO filing forms are correct. It is difficult to remove a document registered with the CRO without a High Court order, which goes without saying is not cheap.
Board of Director Meetings
A note of Directors meetings should always be taken. Any issues raised or resolutions passed should be recorded in the Minutes of the meeting. The Minutes must then be signed off by the Chairman of the Board and should be filed in the Company's Minute Book.
Annual General Meeting (AGM)
An AGM must be held once a year and not later than 15 months after the last AGM. Shareholders are entitled to a minimum of 21 clear days' notice, unless shareholders consent to a shorter notice period.
Extraordinary General Meeting (EGM)
Where a special resolution is required an EGM is held after giving 21 clear days' notice. The Notice to shareholders must include the time and location of the EGM but crucially must state the motive for the EGM and provide the exact wording of any Special Resolution proposed. Often Companies forget the small secretarial matters despite being obliged under legislation. However such forgetfulness can cause unforeseen and unnecessary problems which could easily have been avoided by putting simple systems in place. In companies the small things do matter and realising that will save you problems down the line. It should also be noted that if a company ultimately runs into difficulties and ends up in liquidation, the first port of call for any liquidator is the company's statutory books and likewise it's the first thing a court will look at it. If they are in order, it's a good starting point for Directors to defend their position against any claim for breaching company law legislation.
For further information please contact Colin Mulhall Tax Partner at firstname.lastname@example.org