BPP University College Of Professional Studies Limited (BPP)
Business Law (BLP)
Exam (elaborations)
*2024* LPC Business Law & Practice (BLP) – BPP Distinction Level Notes & Step-by-Step Exam Solutions
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Course
Business Law (BLP)
Institution
BPP University College Of Professional Studies Limited (BPP)
*Up-to-date 2024 Distinction level EXAM READY notes* for the BLP core module of the LPC at BPP University.
*Achieved a grade of 98% with just these notes in the exam*
*Suitable for students studying the LPC or LLM at the University of Law, BPP & all other universities*
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SUBJECT PROCESS RESOLUTION REQUIRED PMM
General PMM Disclosures of Interest D’s call a GM [s.302] (normal) PMM Filings at CH
-Any Ds with a i. approve form of notice of GM which s.30(1): File special resolution within 15
direct/indirect interest in includes: days of it being passed
the proposed (i) s.311- time, date & location of s.355(1): draw up minutes from GM
transaction/arrangement meeting [s.360(1): clear day rule & and keep these for at least 10yrs
with C should declare s.1147: default rule- if notice
their interest to fulfil posted/emailed then deemed served s.248(1): draw up minutes from BM and
s.177. Even if board are 48hrs after posting/sending]; and keep these for at least 10yrs NB minutes
aware of their interest (ii) s.283(6)- precise wording of any can note that consideration given to
(in which case special resolutions to be voted on; and s.172 (duty to promote success of C)
s.177(6)(b) exception (iii) s.325(1)- statement that any member when taking board decisions
could apply) they should can appoint a proxy. s.357- Records of Decisions by sole
disclose anyway so that ii. direct secretary to give notice of GM in member-
their disclosure is accordance with s.308 (hard Where sole member takes any decision
recorded in a board copy/electronic copy/on website); and it that may be taken at a GM and has
minute. should be sent to: effect as if agreed at GM then must
- N.B. MA 14 prohibits (i) SHs [s.310(1)(a)]; (unless it is a written resolution) provide
D with an interest from (ii) Ds [s.310(1)(b)]; and C with details of that decision.
voting/ counting (iii) C’s auditors [s.502(2)].
towards quorum (unless
MA 14 has been
disapplied by SHs or if
D’s interest cannot
reasonably be regarded
as likely to give rise to
CoI (MA 14(3)(b)))
CHANGE SHELF Change Name Special Resolution [s.77(1)(a)] (i) Copy of special resolution within 15
COMPANY or days to CH (s.30(1)); (ii) Notice of
change of name to registrar asap
Board Resolution [s.77(1)(b)]- rare, by (s.78(1)) [Form NM01]; (iii) disclose C
following procedure in AoA name on office etc. (s.82); (iv) draw up
and keep GM minutes for at least 10 yrs
[s.355(1)]
Change AoA Special Resolution [s.21(1)] i) Copy of special resolution within 15
days (s.30(1)); ii) send new AoA to CH
(s.26(1)); (iii) draw up and keep GM
minutes for at least 10 yrs [s.355(1)]
Appointment of new Board Resolution (more common) [MA (i) Form AP01 notifying appointment of
Ds/secretary 17(1)(b)] D to CH within 14 days (s.167(1)); (ii)
or Form AP03 notifying appointment of
secretary to CH within 14 days
Ordinary Resolution [MA 17(1)(a)] (s.276(1)); (iii) change register of
directors (s.162); (iv) amend secretaries
register (s.275); (v) draw up minutes
from BM and keep for at least 10 yrs
[s.2481(1)]
Resignation of existing D can resign by notifying BM of resignation (i) form notifying termination of Ds’
Ds/ secretary (e.g. by letter) [MA 18(f)] appointment to CH within 14 days
(s.167(1)) [TM01]; (ii) form notifying
Board Resolution to accept resignation termination of secretary’s appointment
[NB resign after new Ds appointed as BM to CH within 14 days (s.276(1)) [Form
might become inquorate and s.154(1)- C must TM02]; (iii) change register of directors
have at least 1 D] (s.162); (iv) amend secretaries register
(s.275); (v) draw up minutes from BM
and keep for at least 10 yrs [s.2481(1)]
Appoint chairperson for Board Resolution [MA 12(1)] (i) draw up minutes from BM and keep
BMs for at least 10 yrs [s.2481(1)]
,SUBJECT PROCESS RESOLUTION REQUIRED PMM
Change Registered Board Resolution [s.87(1)] & D’s general (i) File Form AD01 at CH asap
Office authority [MA 3] (s.87(2)); (i) draw up minutes from BM
and keep for at least 10 yrs [s.2481(1)]
Change Accounting Board Resolution [s.392(1)] & D’s general (i) File Form AA01 at CH asap
Reference Date authority [MA 3] (s.392(1)); (ii) draw up minutes from
BM and keep for at least 10 yrs
[s.2481(1)]
Appoint Auditors Board Resolution [s.485(3)] (i) draw up minutes from BM and keep
or for at least 10 yrs [s.2481(1)]
Ordinary Resolution (only at specified times
if Ds fail to appoint auditors) [s.485(4)]
Transfer Shares to new Board Resolution [MA 26(1)] & Ds can (i) receive and approve the STF [MA
owner by approving STF register or refuse [s.112(2)] 26(5) gives Ds discretion to refuse to
register a transfer]; (ii) File Forms
PSC02 and PSC07 notifying a relevant
legal entity with significant control and
individuals ceasing to have significant
control to CH within 14 days
(s.790VA); (iii) update PSC register
(s.790M) to reflect new shareholding
within 14 days; (iv) update Register of
Members[s.112(2)]; (v) issue new share
certificate to new SH (s.776) within
2mths and cancel the old share
certificates; (vi) draw up minutes from
BM and keep for at least 10 yrs
[s.2481(1)]
EQUITY Refuse to register Board Resolution [MA 26(5)] Directors may refuse to register the
FINANCE transfer of shares transfer of a share and return to
transferee with notice of refusal unless
suspect fraudulent [under s.771 must
give reasons]
STEP 1: Any cap on Ordinary Resolution pre-2006 C’s can (i) file new articles (s.26(1)); and (ii) for
the number of shares remove/amend deemed restriction from AoA CA 2006 Cs: file resolution (SR to
that may be issued by [SI 2008/2860, Schedule 2, paragraph amend articles: s.29(1)(a) and s.30(1));
authorised share 42(2)(b)] or (iii)
capital (ASC)? for CA 1985 Cs: file OR to remove cap
Special Resolution [s.21(1)] ASC cap can be (SI 2008/2860, Schedule 2, paragraph
removed/limit increased by amending AoA 42(3); s.29(1)(e) and s.30(1)).
STEP 2: Do the (i) s.550(a): for post-2006 private Cs with Authority arising under s.550 [if pre-
directors need only one class of shares in issue, Ds 2006 private C with only one class of
authority to allot under automatically have power to allot shares of shares]:
s.550/s.551? that same class (unless prohibited by (a) file any OR granting Ds of
AoA/opted out of s.550 in AoA); or pre-2006 Cs authority to rely
on s.550 at CH (SI 2008/2860,
(ii) if one class of shares for pre-2006 Cs need Schedule 2, paragraph 43(3),
Ordinary Resolution to authorise Ds to rely s.29(1)(e) and s.30(1)) within
on s.550; or 15 days.
(b) N.B. no action required for
(iii) where has in issue/plans to allot more post-2006 Cs.
than one class of share]: s.551(1): authority
may be given by: Authority given under s.551
(a) a provision in AoA [very rare]; or [Authorisation given by the C]:
(b) by resolution [s.281(3)- this is an (a) File any OR granting Ds
Ordinary Resolution unless AoA authority to allot the shares at
require higher majority] CH (s.551(9), s.29(1)(e) and
s.30(1)) within 15 days.
STEP 3: Is it necessary Is the C. issuing equity securities? (i) file the SR disapplying pre-emption
to disapply pre- YES: Shares that have rights to dividends OR rights at CH (s.29(1)(a) and s.30(1))
emption rights on the capital that are not fixed [a benefit that is within 15 days after it is passed.
allotment? uncertain]
,SUBJECT PROCESS RESOLUTION REQUIRED PMM
NO: If shares have rights to receive dividends
AND capital assets that are fixed (i.e.
capped), they are not ordinary shares and they
do not have to be offered pre-emptively]
If Ds given authorization automatically
under s.550 [for private C. with one class of
share]
Disapplication of PE rights for private Cs with
only one class of share can be done by Special
Resolution [s.569]
If Ds given authorization by C under s.551
a) General disapplication of PE rights
by Special Resolution [s.570(1)];
b) Specific disapplication of PE rights
for specific allotment of shares by
Special Resolution [s.571]
STEP 4: Is C creating Amend AoA by Special Resolution to include (i) file SR at CH (s.30(1)) within 15
a new class of shares rights attached shares within that new class days after it is passed; (ii) file amended
by issuing these [s.21] AoA at CH (s.26(1)) within 15 days;
shares? and (iii) file form SH08 within 1 month
of creation of new class of shares
(s.636(1))
STEP 5: Directors Ds by Board Resolution allot new shares on (i) File Form SH01 notifying CH of
must pass a Board behalf of C [s.555: notify CH] share allotment within one month
Resolution to allot the (s.555(2)).
shares (ii) If applicable, file forms PSC02 and
PSC07 notifying CH of changes to PSC
register within 14 days of updating PSC
register (s.790VA). Duty to notify of a
relevant event which includes changes
to PSC register is in s.853B. [N.B. check
if PSC conditions met in Part 1 of Sch
1A of CA 2006: (i) more than 25%
shares; (ii) more than 25% voting
rights; (iii) right to appoint majority of
board; (iv) right to exercise significant
control.]
(iii) File Statement of Capital within 1
month (must be sent with Form SH01)
(s.555(3) & (4)). Duty to deliver
statement of capital is in s.853D.
(iv) Update Register of Members
(s.113- name/address/date
registered/no. of shares/class of shares)
so it includes details of new
shareholders (s.554)
(v) Issue new share certificates to new
shareholders within 2 months of the
allotment of shares (s.769)
(vi) Update PSC register within 14
days (duty in s.790M)
Consequences of Ds a. Validity: s.549(6): allotment to
allotting shares new holder of shares still valid and
without authority enforceable (in the absence of other
defects) even if allotted without a
s.551 authority
b. Consequences for Ds:
s.549(4)&(5): D who knowingly
contravenes s.549 commits
,SUBJECT PROCESS RESOLUTION REQUIRED PMM
criminal offence and liable to a
fine.
c. s.551(4)(b): SHs can revoke
existing s.551 authority to allot at
any time by Ordinary Resolution
d. s.570(3): revocation of s.551
authority means subsisting
disapplication of pre-emption
rights under s.561 no longer valid
(i.e. PE rights will then apply).
DEBT FINANCE Enter into a loan facility Board Resolution [s.40: power of Ds to bind (i) approve entry into the loan facility;
C] (ii) authorise signatory for the loan
facility; (iii) draw up minutes from BM
**N.B. check there is nothing in AoA and keep for at least 10 years [s.248(1)]
restricting C’s powers to borrow/grant security NB minutes can note that consideration
given to s.172 (duty to promote success
of C) when taking board decisions
**N.B. the loan agreement itself is not
registrable
Grant security Board Resolution [s.40: power of Ds to bind (i) s.859A(2): Registrar shall register
C] any security created by a C if C/lender
delivers within 21 days beginning with
**N.B. check there is nothing in AoA the day after the day on which the
restricting C’s powers to borrow/grant security charge is created (s.859A(4)) a section
859D statement of particulars in relation
to the charge on Form MR01
(ii) s.859P: a C. must keep available for
inspection a copy of every charge.
(iii) s.859Q(2): These documents must
be kept at C’s registered office
Consequences of s.859H: if charge is not registered at all/
failing to register a not within the 21-day period:
charge • the charge is void against a
liquidator, administrator and
any creditor of the company;
and
• the debt becomes
immediately payable.
Negligence claim against law firm
DIRECTOR’S Director’s Duties **s.171: Duty to act within powers
DUTIES **s.172: Duty to promote the success of
the company:
s.173: Duty to exercise independent
judgement:
**s.174: Duty to exercise reasonable
care, skill and diligence:
**s.176: Duty not to accept benefits
from third parties:
**s.175: Duty to avoid conflicts of
interest:
**s.177: Duty to declare interest in
proposed transaction or arrangement-
[READ IN CONJUNCTION WITH
MA 14]
s.182: Declaration of interest in
existing transaction or arrangement:
[READ IN CONJUNCTION WITH MA
14]
MA 14 If want D to count in the quorum and vote
where there is a CoI:
,SUBJECT PROCESS RESOLUTION REQUIRED PMM
Ordinary Resolution [MA (14)(3)(a)] to
disapply MA 14(1) in that specific case (but
would have to be done everytime there is a
potential conflict)
or
Special Resolution [s.21] to amend MA 14(1)
Directors Disclosure 1. Disclosure of identity of Ds and
secretary
[Register of Ds, N.B. also contains
other directorships so gives SH power
to hold Ds to account]
▪ s.162: must keep Register of
Ds/must be kept for inspection at
registered office by SH for free and
any other person for a fee
▪ s.163: name, service address [not
residential address], nationality,
occupation, DoB, on Register of Ds
▪ s.167: C. must notify registrar of
changes to Register of Ds [use:
Form AP01 for appointments;
Form TM01 for
resignations/removals; Form CH01
for change of details e.g. address]
▪ s.275-278: (for secretaries)
▪ s.1085(1): information kept at CH
is available for inspection by the
public
2. Disclosure required in notes to
annual accounts
[salary of Ds, bonuses & pension
entitlements- then SHs can see if Ds
paying themselves too much]
▪ s.412: information about directors’
(and past directors’) remuneration
and gives the SoS the power to
make provision to determine what
information will need to be
included in the C’s annual accounts
e.g. Ds’ salaries/ bonus
payments/pension
entitlements/compensation paid to
Ds (and past Ds) for loss of office
▪ s.413: relates to the disclosure of
information on advances and
credits given by a C to its Ds, and
guarantees entered into by a C on
behalf of its Ds.
3. Disclosure of information on D’s
service contracts
▪ s.227: wide definition of D’s
“service contract”: contract with C
or contract for services.
▪ s.228: must keep at registered
office copies of its Ds’ service
contracts. If contracts not in
writing, written memoranda setting
out the terms of service contracts
must be kept. Retained for at least
one year after the date of
termination/expiration.
▪ s.229: contract/memoranda must be
open to inspection by any SH
, SUBJECT PROCESS RESOLUTION REQUIRED PMM
without charge and SH’s right
(subject to payment of a fee) to
request copy.
▪ N.B. s.188: where service contract
has guaranteed term of more than 2
years then needs SH approval by
ordinary resolution
4. Disclosure of interest in
transactions/arrangements (which can
be ratified by other Ds)
[Depends on whether it is an existing or
proposed transaction/arrangement. D
need only make a disclosure under
either s.177 or s.182].
SH Ratification of D’s Ordinary Resolution [s.239(1)]
breaches of duty
s.239: Ratification of acts of directors:
(1) SHs can ratify conduct of D [includes
former and shadow Ds as well] which is
negligence/default/breach of duty/breach of
trust [BUT NOT fraudulent/illegal acts-
s.239(7)]
(2) ratification needs OR [i.e. more than 50%]
[N.B. unless AoA require higher majority]
(3) if written resolution then D (if SH) or
connected member [see s.252, s.253 & s.254]
DON’T count as eligible member
(4) if proposed at SH meeting, then disregard
votes of D (if he is a SH) and any connected
SH BUT still counted in the quorum
Remedies for breach of Remedies against D for the benefit of
D’s duties the C (i.e SH claims)
s.178: Civil consequences of breach of
general duties-
(1) consequences for breach same as
for breach of the corresponding
common law or equitable
principles
(2) enforceable in same way as any
other fiduciary duty owed to C by
D (except for s.174- duty to
exercise reasonable, care & skill)
Non-Fiduciary Duties [s.174: Duty to
exercise reasonable care, skill &
diligence]
• Damages (this is the only remedy
for breach of s.174 as this duty
isn’t a fiduciary duty).
Fiduciary Duties [s.171, 172, 173, 175,
176, 177 NOT s.174]
• Damages
• [if transaction not taken place]
Injunction to prevent proposed
transaction from taking place;
• [if transaction has taken place]
Voiding/setting aside
transaction/restoration (require Ds
to restore C’s property)
• Requiring Ds to account for profit
[if they’ve made a gain]
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