Your supervising solicitor has asked you to review the following information relating to a company

Total Marks on the oral – 78/100.

PART A

Your supervising solicitor has asked you to review the following information relating to a company who are currently experiencing some difficulties and require some advice.FC Wolfscastle Limited (the “Company”) is a private limited company (with unamended Model Articles) that runs a football club in the English Football League Championship. It is currently experiencing a decline in both on-field performance and financial stability. They have recently been relegated from the Premier League and are having to adapt to life in a lower division with less revenue from sponsorship, broadcasting rights, ticket sales and general matchday revenue due to a fall in matchday attendances.For the above reasons, the board of directors of the Company are facing significant challenges.One possible solution is for the Company to (1) appoint a new director to oversee the playing side of the operations. The Company are hoping to appoint Emilia Sanchez, who is currently a director of football for a leading club in Italy. Emilia has indicated her desire to join the board of directors so long as they offer her a (2) 3-year fixed term service contract.Tom Stone, who is a director, and has been in charge of the commercial operations for 20 years, was recently tasked with seeking a new sponsor for the Company’s home and away shirts for the 2024/25 season due to commence in August 2024. Tom proposed that the Company enter into a contract with a particular sponsor. In fact, (3) Tom did not conduct any research as to whether this particular sponsor offered the best deal. The contract between the Company and the new sponsor is not as lucrative as other members of the board would have hoped and, as such, this new contract has placed additional financial hardship on the Company. Following this revelation, the Company’s shareholders have lost all faith with Tom as a director (4).The Company’s stadium, The Wolf Whistle Stadium, is currently in a state of disrepair with certain sections of the stadium currently closed to supporters due to safety concerns. The board of directors would like to purchase a plot of land (5) in order to build a modern stadium in the hope that they can attract larger attendances and capitalise on the potential commercial opportunities that a new stadium could provide. Tom Stone’s brother (6), Timothy Stone, owns some land near to The Wolf Whistle Stadium that could be a suitable site for a new stadium. The land is valued at

£200,000 (7).

Below you will find a company factsheet as Document A relating to the Company.Stephen Johnson, the chair of the board, has informed the firm that the Company has a policy of passing shareholders’ resolutions by using (8) the general meeting procedure if possible.Stephen has told us that all the directors will attend any board meetings and all the shareholders will attend any general meetings.Stephen Johnson, Tom Stone, Susanna Adlington, Dennis Blackshaw and Zoe Williams are in favour of the proposals to appoint Emilia as a director, award her a 3-year fixed term service contract and to purchase the land for £200,000. Bradley Hardwick and Barry Smith are against all these proposals (9).You have a meeting with your supervisor at the end of next week. You will be asked questions regarding the issues raised above. Your supervising solicitor will expect you to provide reference to specific authority when providing answers to the questions. 1 / 3

The articles are adopted without amendments. Run-down of the decisions to be made: DecisionAppointing Emilia as new director Service contract for over 2 years Dismissing a director Purchase of Land Power of directors or shareholders Directors OR Shareholders Shareholders decision that will give directors power to enter into the contract Shareholder’s consent for the guaranteed term for over 2 years – terms of service of the contracts etc are not shareholders decisions.Shareholders Directors Type of Resolution BR to appoint Emilia as a director

Ordinary resolution:

Board Meeting 1- Agree terms of the contract with SH consent Call GM or circulate written resolution for SH approval GM- SH consent by way of written or ordinary resolution Board Meeting 2- Enter into the contract Authorise a director to enter into the contract.Ordinary Resolution in GM only

that Tom be removed from office as a director of the company.

BM to purchase land Statutory Authority MA 17 – terms of service

• 188 CA 2006 –

service contracts over

• years must be

consented to by the shareholders.MA 17 for deciding the terms of service contract MA 19 specific power to decide on director’s remuneration s.168(1) CA 2006 Have general powers to run a company (MA 3) Can be delegated - MA

• → the directors can

delegate their powers as they see fit, so employees will be allowed to make decisions within their job description 2 / 3

Part 1: Board Meeting (‘BM1’)

Calling The BM can be called by any of the directors, usually the Chairperson.Notice The requirement of serving a valid notice for a board meeting are found in MA 9: -The notice must be addressed to all the directors; does not need to be formal or in writing.-Within reasonable time (Re Homer District); and this is interpreted on the facts.-Must mention the time, date and place of meeting MA 9 (1) - (2).-Mention the method of communication if not face to face MA 9(3).Quorum and Directors’ interests The quorum is two (Model Article 11). It seems that all the directors will attend so there will be no problem with this. To approve the draft terms of the contract to purchase the land and purchase the land. To approve the draft terms of Emilia’s fixed term contract, subject to obtaining the necessary members’ resolution to approve the fixed term contract (MA 19). As the first BM will be convened only to discuss holding a GM, there are no declarations of interests required at this time (s 177 CA 2006)  There is no impact on quorum and voting. Voting will be held by a show of hands, one director, one vote MA 7.Declarations of Interest -For the purchase of the land, Tom must declare his interest if the other directors are not already aware of it. It is

best practice to declare it anyway. The exceptions are:

Unless (s 177(6)):

a)It can’t reasonably be regarded as likely to give rise to a conflict of interest b)If the other directors are already aware of it c)It concerns terms of a service contract that have or are to be considered by a meeting of the directors Board Resolutions and Voting  To approve the draft terms of the contract to purchase the land and purchase of land  To approve the draft terms of Emilia’s fixed term contract, subject to obtaining the necessary members’ resolution to approve the fixed term contract (MA 19). The first board resolution will be to hold a general meeting to discuss the following resolutions: -Awarding Emilia a 3 year fixed term contract (s 188) -Appointing Emilia as a director (MA 17) – can be done in a BM as well -Dismissing Tom as a director (s 168) – cannot be done as a WR  This will be passed by an above 50% majority. Nothing to suggest that this shouldn’t go through, with Stephen, Tom, Susanna, Dennis and Zoe in favour and Bradley and Barry against – 5:2, it will go through, even if Tom

votes against, 4:3, it will go through.

 Purchasing the new land. Likely to pass; Tom cannot vote; 6:0.

 Should there be a tie in passing this resolution, the chair, Stephen, may have an extra vote to break the tie (MA 13).

Administration:

Minutes of BMs 2 (s.248/MA15) – keep at the registered office or (Single Alternative Inspection Location) SAIL, for 10 years; failure to do so is an offence (s 248(3)).Purchasing new land for the company

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