CASE STUDY

Your firm acts for Fairchurch Communications Limited ("Fairchurch"), a company incorporated on 5 May, 2014. Fairchurch is a company that supplies communication infrastructure and associated goods and services. It has an issued share capital of 100,000 ordinary 1 shares, all of which are fully paid.

Fairchurch's directors and shareholders (all of whom acquired and paid for their shares on incorporation) are as follows:-

Name	Shares Held	Director
Raquel Garcia	30,000 ordinary	Managing Director (Chair)
William Farridge	25,000 ordinary	Operations Director
Aaron Bokowski	20,000 ordinary	Sales Director
Sara Jackson	15,000 ordinary	Finance Director
Krishan Parmar	5,000 ordinary	Non-executive director
Rana Moyo	None	Non-executive director
Trevor Windsor	5,000 ordinary	No

Fairchurch has adopted the Model Articles for Private Companies Limited by Shares, without amendment.

QUESTION 1

PART A

Fairchurch has been successful and has maintained healthy sales and profits during the pandemic. The board of directors now has plans to expand the business, but Fairchurch does not currently have the cash reserves to achieve its aims. The board has therefore been seeking funding from various possible sources, and Raquel has had discussions with her brother, Ryan, who has agreed to invest 100,000 into Fairchurch in return for the allotment to him of 20,000 1 ordinary shares (on the basis that the shares have now been valued at 5 per share).

In addition (and on the same basis), William has agreed to invest a further 10,000 in return for the allotment to him of an additional 2,000 1 ordinary shares.

Sara and Trevor are opposed to the allotment of shares to Ryan as they do not agree with the board's expansion plans and do not want to see an "outsider" introduced into the company. They therefore intend to do all they can to block the proposed allotment of shares to both Ryan and William and will attend any meetings to put forward their views. Krishan is presently inclined to support Sara and Trevor; however, Raquel is confident that she can persuade him to change his mind. All the other directors are in favour of the proposal.

Your firm has been consulted by Raquel to advise on the implementation by Fairchurch of the proposal to allot the shares to Ryan and William on the above terms, to take effect as soon as possible. She has already called a board meeting to take place four days from now, when everyone will be in the office and can and will attend.

You have been instructed by your supervisor, Sandy Wright, to prepare a memorandum in which you must:

1. Explain whether any shareholder resolutions are required; and

1. Set out a plan of the procedure necessary to allot the shares to Ryan and to William.

You should include in your procedure plan:

• all the decisions that must be taken by the directors and/or shareholders.

• If any shareholder resolutions are needed, the written resolution procedure rather than the procedure for a general meeting.

• Any related requirements of the Companies Act 2006 and Fairchurch's articles which must be complied with.

However, you are instructed NOT to include details of

• notice of the board meeting already called by Raquel, or

• any external filings or internal administration which must be dealt with 7as a consequence of the allotment.