304 Chapter 11Companies (2): Management, control and winding up
Section 240 provides that a director’s residential address is ‘protected information’, even
after he has left the company. Section 241 prevents the company from using or disclosing
this protected information unless it does so for one of three purposes:
n communicating with the director in question; or
n sending required particulars to the Registrar of Companies; or
n complying with a court order.
However, the protected information can be used or disclosed in other circumstances if the
director in question consents.Control of the company
The directors have the power to manage the company while they hold office. However, the
long-term control of the company lies in the hands of the company members. The members
exercise this power by passing resolutions at company meetings. As we have seen, a
company’s directors can always be removed by an ordinary resolution of which special
notice has been given.Types of shares
A company’s articles may allow for the creation of different types of shares, with each class
enjoying different rights. If there is only one class of share then each share will carry the
same right to vote. However, different classes of shares might carry different voting rights.
For example, in Holt vHolt (1990)a company had 999 class B shares, which carried 1 vote
per share, and 1 class A share, which carried 10,000 votes.
Generally, ordinary shares will carry the right to vote at company meetings, the right to
a dividend if one is declared and the right to share in the company’s surplus assets if the
company is wound up. (The surplus assets would consist of any money left once all of the
company’s property had been sold and all of its debts paid.) Members with these ordinary
shares are known as ordinary members. The dividend paid to any ordinary member is paid
as a certain amount per share held. For example, a company which has ordinary shares with
a nominal value of £1 might declare a dividend of 5p per share. (We saw in the previous
chapter that the nominal value of a share represents the face value which the company has
agreed that the share should have.)
The paid-up share capital of a company is the total amount of the nominal share value
which has been actually paid by the members. The called-up share capital consists of the
paid-up share capital and additional amounts which have become due to be paid towards
the nominal value by the members. A public company cannot return capital to the members,
because the creditors of the company are entitled to expect that the capital will be available
to pay them, unless it has been lost in the course of the company’s business. A private
company can reduce its capital if it passes a special resolution and adheres to statutory
procedures.Preference shares
The most common type of shares which are not ordinary shares are preference shares.
The term preference share is not strictly defined and any rights might possibly attach to
preference shares. The articles of association will spell out the rights attaching. However,
in general preference shares have the following characteristics. The dividend paid to