COFA - Trust and Company Administration

DEFINITION AND FEATURES OF A COMPANY

Students will be able to:-

• define a company and identify the purpose of company law
• compare a sole trader/partnership to a company and list advantages and disadvantages
• describe the features of a company
• discuss the ‘veil of incorporation’ concept and the circumstances when it may be lifted
• explain the concept of public companies

INCORPORATION PRINCIPLES

Students will be able to:-

• outline the incorporation procedures in their jurisdiction
• define the Memorandum & Articles or equivalent constitutive documentation and list typical contents
• describe share capital and distinguish between authorised and issued share capital
• prepare a proforma Inaugural minute to ensure company is ready to commence trading

SHAREHOLDERS AND DIRECTORS

Students will be able to:-

• understand the importance of shareholders, their rights and powers
• define the use of nominees and their effect on day- to-day administration
• define who a director is and explain their duties, powers and liabilities
• describe the company secretary and explain their role and duties

MEETINGS AND RESOLUTIONS

Students will be able to:-

• describe the various shareholders’ meetings
• explain the statutory periods of notice and waivers together with voting rules (including proxies)
• describe when a special resolution is required, how they are achieved and registered
• explain how directors’ meetings are managed
• describe what activity is normally undertaken in a directors’ meeting

REGISTERED OFFICE AND COMPANY RECORDS

Students will be able to:-

• explain the importance of the location of the registered office
• describe the function of the registered office
• recognise the company seal (as the corporate signature) and be able to explain the effect of
• notarising/legalising
• describe the register of members
• describe the register of directors and secretaries
• explain the contents of the Annual Return, details of its completion and the effect of the failure to complete

TERMINATION AND MIGRATION

Students will be able to:-

• explain the circumstances as to when a company may no longer be required or able to continue as a going concern, e.g. shareholder require return of equity, or creditors voluntary liquidation
• explain what is meant by a compulsory liquidation, voluntary liquidation, dissolution, and striking-off; and evaluate the most appropriate voluntary termination method in given circumstances
• explain redomiciliation, including the requirements for ‘departure’ from one jurisdiction, and ‘continuation’ into the receiving jurisdiction

HISTORY OF TRUSTS

Students will be able to:-

• outline how trusts originally evolved
• understand how this underpins their traditional uses now

FORMATION AND FUNDAMENTALS OF A VALID TRUST

Students will be able to:-

• define what a trust is
• understand how a trust arrangement can be created and what is necessary to make it valid
• explain how trusts are utilised and the importance of ensuring that they are effectively created, managed and controlled.
• define the elements necessary to create a valid trust

SETTLOR

Students will be able to:-

• explain the need for the settlor to have both legal capacity and good title to assets before they can be gifted i.e. to the trust and the effect of this not being in place
• appreciate the effect of transferring assets
• review the implications of the use of the ‘dummy settlor’

TRUSTEES

Students will be able to:-

• describe the fundamental role of the trustee
• explain the advantages of appointing prudent professional trustees
• explain how a trustee should behave
• describe the duties and powers to which a professional trustee must adhere
• outline who can be appointed, how this is finalised and how they are guided (i.e. through the trust deed)
• describe how the key duty to ‘enhance and maintain’ trust assets is facilitated by a review of how trustees should invest
• identify a potential breach of trust
• outline the liability placed on trustees

BENEFICIARIES

Students will be able to:-

• identify the true class of beneficiaries and their particular rights in connection with the property
• describe the beneficiaries’ right to information
• explain the practical implications and risks of disseminating such information
• identify practical measures to manage this risk

THE TRUST FUND

Students will be able to:-

• explain what constitutes property
• discuss how long property should be held for and why; i.e. rules of perpetuity
• describe restrictions on property, i.e. excessive accumulation and the rules attached thereto
• explain the need for the trust to be effectively funded at creation to ensure it is completely constituted.
• explain the importance of ensuring property effectively passes from the settlor to the trustees
• describe the various formalities to perfect the transfer
• describe the status of a ‘volunteer’ under equity
• assess the effect of assets not effectively passed to the trustees
• advise on remedies and possible implications to the settlor and trustee
• demonstrate the effect of void and voidable trusts

TYPES OF TRUST

Students will be able to:-

• distinguish between the different types of trusts typically available in their jurisdiction
• outline the advantages of a discretionary trust
• discuss its flexibility but countered with total lack of control from the settlor’s perspective
• compare and contrast the fixed interest nature of the trust to discretionary
• explain how this will affect the way they are administered.
• describe various types of fixed interest trusts e.g. life interest, accumulation and maintenance, charitable, protective, trusts purpose
• explain who typically would utilise them and the planning rationale behind it

THE PROTECTOR

Students will be able to:-

• describe the role and function of a protector
• explain who is typically used
• discuss the limitations on their powers i.e. dangers of excessive powers

TRUST DEED AND OTHER DOCUMENTATION

Students will be able to:-

• identify key clauses i.e. how assets are held e.g. fixed or discretionary
• identify the key documentation required to establish and maintain a trust arrangement effective
• appreciate that it is the trustees’ rule book which is legally binding

DECISION MAKING PROCESS

Students will be able to:-

• discuss what information should be held and who should have access
• draw up a standard trustee minute to include:-
• (i) consideration
• (ii) decision made to be prudent
• explain the importance of maintaining accurate correspondence and permanent files
• describe what could be disclosed under ‘discovery’
• appreciate the need for accounts
• discuss barriers to producing meaningful accounts
• understand the importance of effectively recording trustees’ decision for management and control purposes and therefore avoid a sham
• discuss strategies for administration to minimise these barriers
• understand the trustee’s duty to be active in their administration
• match the administrative function of decision making with trustees’ duty of prudence, due care and diligence, good faith etc with particular reference to the making of distributions
• explain the Rahman case and its implications for good practice

MEETINGS

Students will be able to:-

• give the definition of a meeting
• discuss the fundamental administrative function of constituting, convening and conducting meetings for both trusts and companies
• understand the principle of management and control
• demonstrate in both a theoretical and applied manner the constitution, convening and conduct of a meeting
• describe requisites of a valid meeting, including notice, quorum, agenda, formal (or procedural) motions, points of order, adjournments, voting, proxies, and minutes
• describe the nature role powers, duties and qualities of chairman

RESOLUTIONS AND MINUTES

Students will be able to:-

• draft appropriate resolutions
• produce a proforma set of minutes
• identify the format of minutes
• discuss the style, form and security of minutes
• outline the practical work of the secretary before, during and after meetings