Raising Capital

-just need one-quarter of the minimum capital to be 'paid up', s.586

Raising money:
- offer its shares for subscription
- an offer for sale: allot entire issue of shares to the issuing house (merchant bank). Issuing house will sell it to its client or general public
- a placing: placed with a group of merchant banks
- rights issue: new shares are offered to the existing shareholders in proportion to their existing shareholding. (pre-emption rights, s.561 2006)

FSA - Financial Services Authority, the UK Listing authority

Obligation when listing
-

Insider dealing
Crimianl
- s.397 FSMA - general catch-all provision
- Part V Criminal Justice Act 1993.
s.52(1)
s.52(2)(a) - induce others to deal in price-sensitive securities/disclose price sensitive info
Civil
s.118 FSMA
Market abuse -

Regulating takeovers
s.219

Statutory Minority protection

s.122(1)(g) 1986 - just and equitable to wind up
Ebrahimi v Westbourne Galleries - E was voted off the board using the power conferred by s.168 2006.
Held: just and equitable to wind up because E agreed to the formation of the company based on the essence that their business relationship will remain the same.
Factors:
- basis of the business was a personal relatiosnhip
- all certain shareholders will participate in management
- restriction on the transfer of members' interest

Grounds:
- Substratum has failed (Re German Date Coffee Co)
-  Fraud. The company was form in order to defraud the shareholders (Re Thomas Edward Brinsmead & Sons)
- Deadlock (Re Yenidje Tobacco Co)
- justifiable loss of confidence in company's management (Loch v John  Blackwood)
- exclusion from participation in a small private company where there was mutual confidence

If other remedies are available, a petition to wind up may be struck out (s.125(2))

s.994 - Unfair Prejudice
(a) company's affairs are conducted unfairly prejudicial to the interests of its member
(b)
Company affairs - Nicholas v Doundcraft Electronics: the failure of a parent company to pay debts due to its subsidiary
Re City Branch Group - director of holding company are also director of subsidiary (corporate veil?)
O'Neill v Phillips - conduct affecting the petitioner qua director will suffice
Re Ghyll Beck Driving Range - son has been unfairly excluded from the management of the golf range.
Held: ordered majority to purchase the petitioner's shares
Re a Company - company articles: a member, on ceasing to be director, would be required to transfer his shares to the company.
Director declined offer. He petitioned to restrain the compulsory acquisition
Interests

Lifting the veil

when to lift the veil:
1. IA 1986, s.213 - fraudulent trading provision. If in the course of winding up the company, anyone carried business intending to defraud the creditors could be called upon to contribute to the debts of the company. (Re Todd)
Re Patrick Lyon - definition: actual dishonesty.
Too difficult to satisfy the criminal burden.

s.214 is introduced to solve this problem: negligence rather than intend to defraud.

Point of no return - a reasonable director would stop trading at this time. Court might lift the veil - the director might be personally liable for the debt (Re Produce Marketing Consortium)

2.Judicial veil lifting -
Gilford Motor Company v Horne,
Jones v Lipman (the company was merely in front for the defendent)
DHN v Tower Hamlets - Denning.
Woolfson v Strathclyde disapproved Denning wholly owned subsidiaries - Z owns all the issued share capital of A,B,C. In realities there is just one business but organised through 4 separate legal personalities.
Adams v Cape Industries - Cape market abestos, also has a US marketing subsidiary.
Creasey v Breachwood Motors -