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The
expression… “the
Company and every officer of it,
who is in default, is liable to
a fine and for continued contravention,
to a daily default fine”
(and variations of it) appears 158
times in the Companies Act 1985! |
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A
breach of some provisions of the Companies
Act 1985 constitutes a criminal offence
and may lead to imprisonment
of up to 7 years! |
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Every
Company must state in legible characters
on its stationery the Company’s
place of registration; the number
with which it was registered; and
if the Company is a limited Company,
it must state this fact. A Company
that fails to do so will be liable
to a fine. |
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It
is generally prohibited and unlawful
for a Company or any of its subsidiaries
to give financial assistance, whether
directly or indirectly to a third
party for the purpose of acquiring
that Company’s shares. Failure
to comply with these provisions by
an officer of the Company can lead
to imprisonment of up to 2 years.
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Directors
allotting shares without authority
may be liable to a fine of the statutory
maximum. Do you have authority to
allot shares? Has the authority expired
by effluxion of time? |
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Subject
to a number of minor exceptions, a
Company is prohibited from making
a loan to a Director of from entering
into any guarantee to provide security
in connection with a loan to such
a Director. A breach of these provisions
constitutes a criminal offence and
can lead to imprisonment, or a fine
or both. |
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A
Company is required to send a copy
of its Memorandum and Articles of
Association to a Member when demanded.
If a Company fails to do so, the Company
and every officer in default is liable
to a fine. |
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The
penalty for the late filing of accounts
may be as much as £5,000. Companies
House is now computerised and is able
to identify defaulters who are even
just a day late and issue penalties
accordingly. Penalties are also imposed
for the late filing of Annual Returns.
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The
Registrar of Companies may remove
a Company from the Register where
he has reasonable cause to believe
that the Company is no longer carrying
on business or in operation. Such
an event may occur where a Company
fails to file Annual Returns or Accounts.
In such circumstances, a Company’s
property goes “bona vacantia”
to the Crown. |
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A
Director who is required to hold shares
in a Company may be liable to a fine
in default. Are you required to hold
shares in your Company? |
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A
Company may not enter into an arrangement
whereby, a Director or a person connected
with such a Director acquires one
or more non-cash asset from the Company,
or, whereby the Company acquires one
or more non-cash asset from such a
Director or a person connection with
such a Director, unless the arrangement
is first approved of by a Resolution
of the Company in General Meeting.
For this purposes, a non-cash asset
must be not less than £1,000. |
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Registration
of a Charge against a Company must
be carried out within 21 days after
its creation. Aside from the fact
that if a Company fails to register
a charge within the stipulated period,
the Company and every officer of it
who is in default is liable to a fine,
the charge may lose its priority as
against subsequent chargees. |
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A
Member of a Company may apply to the
Court that a Company’s affairs
are being conducted in a manner which
is unfairly prejudicial to the interests
of some of its Members (including
at least himself) and the Court can
make whatever order it thinks fit
in the circumstances. |
