Speaking: Presenting a spin-off

One of your corporate clients is planning to carry out a spin-off. He has written you the following email.

Dear Mr Daniels

Ms Diaz has told me that you are going to be at the shareholders’ meeting next Wednesday. Would you mind addressing the group briefly before the meeting starts? I think they would appreciate some basic information about things like what a spin-off is, why the spin-off will be done, etc. just so they can understand the rationale behind it better. Of course, it’s very important that they realise that the spin-off will not affect them negatively. I think 10-15 minutes will be enough for this, and then you and I could field their questions and try to clear up any misunderstandings.

Please let me know what you think.

Best wishes

Adam Tyler

11. Using the presentation as a model and the information from Reading 2, prepare the beginning of such a presentation.

12 .Take turns presenting your beginning to a partner. Check that your partner has:

· introduced him/herself

· informed you about what points will be covered

· mentioned any practical matters (questions, timing, etc.)

A checklist

Lawyers play an important role in the processes involved in altering the structure of a company. For example, they review the documents connected with such changes to ensure that all the relevant statutes have been complied with.

Checklists are useful tools for making sure that the proper procedures have been followed and the necessary documents drawn up. Once an issue has been addressed, a lawyer will tick the box to confirm that he has considered the particular matter listed. You will read about two lawyers discussing such a checklist. A more experienced lawyer guides his younger colleague through the list of actions to be taken and documents to be filed.

13. Read the dialogue and answer these questions.

1. What kind of change are they discussing?

2. What two meetings need to be held?

3. How many documents need to be filed at Companies House?

Jack: Rob, do you think you could spare a minute and help me out with something?

Rob: Sure, what is it?

Jack: Well, I'm working on the Longfellow case - you know, the company that’s planning to increase its share capital.

Rob: Right. What do you want to know?

Jack: I have to admit that this is the first time I’ve done this kind of thing. There certainly are a lot of steps that have to be followed, and I don’t want to forget anything.

Rob: I understand. But it’s really pretty straightforward, you’ll see. Let me show you what we usually use when we take care of any kind of changes in company structure. We’ve got these checklists, you see, that tell you what has to be done and in what order. It also tells you what regulations to refer to in different cases, and what documents need to be filed, for example. Have a look.

Jack: Looks good - I think this would help.

Rob: I’m sure it will. Let me talk you through it...

Jack: Great.

Rob: Well, the first thing you have to do is check the memorandum of association, to find out how much the company’s share capital is.

Jack: OK.

Rob: Then you have to find out whether they’ve issued all their share capital already or not. The next step would be to determine the amount of increase of share capital.

Jack: Ah, I know that already.

Rob: Good. Tell your client that they have to call a board meeting, but at reasonable notice. And a quorum of directors has to be present.

Jack: A quorum?

Rob: That’s the minimum number of members required so that business can be carried out.

Jack: Ah-hah.

Rob: At this meeting, the directors have to pass a resolution that they’ll hold an EGM where they will vote on the increase of share capital.

Jack: An EGM is the extraordinary general meeting, right?

Rob: Right. But before the EGM can take place, the shareholders have to be informed by notice about the EG This notice must state the following things - you see them listed here on the checklist: date, time, place, proxy, ordinary resolution, consent to short notice.

Jack: What does ‘consent to short notice’ mean?

Rob: That just means that they agree to the meeting being held soon, without everyone knowing about it a long time in advance.

Jack: I see. And now what?

Rob: Well, the chairperson is required to preside at the EGP, and it’s necessary that a quorum is present. Then the resolution has to be passed by a simple majority. That's all.

Jack: What about the paperwork that has to be done?

Rob: Right. Well, minutes of the two meetings - the board meeting and the EGM - have to be drawn up. Finally, within 15 days, the following documents have to be filed at Companies House: the ordinary resolution, the notice of increase of nominal capital and the amended memorandum. And you're finished.

Jack: Thanks, Rob. I'll just take a copy of that checklist.

14 .Read again and complete the missing items (1-10) in the left-hand column of the checklist, using up to three words for each space.

Checklist on increasing a company's share capital	Matter considered
• Check the memorandum of association to identify the company's 1).................................................. See also authority to increase capital under Articles. Consider whether creation of new shares will involve variation of class rights. If so, appropriate consents may be required.
• Has the company issued all its share capital?
• 2)..................................................of increase of share capital.
• Convene 3).................................................. at reasonable notice: Normal procedure or consider using written resolution procedure.
• Ensure a quorum of 4)..................................................is present at the board meeting.
• Directors have to 5)................................................. that they will put the increase of share capital to vote at an extraordinary general meeting (EGM).
• Convene an EGM by notice or use written resolution procedure.
• If written resolution procedure is not used, notice to shareholders must state: a date btime c place dproxy e ordinary resolution fconsent to 6)..................................................
• Ensure the 7).................................................. presides at the EGM and that a quorum of shareholders is present.
• Pass the ordinary resolution by 8)............................................... on a show of hands or by poll.
• Draw up board and EGM minutes.
• Lodge at Companies House 9)................................................. days: a ordinary resolution; bnotice of increase of 10).................................................. (Form 123); c amended memorandum and (if necessary) articles of association.

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