Dear Trainee David Kempton of KAL called me today to say that he wants us to incorporate another company for him which he intends to use as the financing company for cars that his customers buy on hire purchase. Essentially as well as buying a car from him they will also get finance to do so from this other company that he will own. I have talked through the process with David and it is more or less in an agreed format. One stumbling block appears to be the fact that David wants KAL to be the only director for the newly formed company, letâ€™s call it NewCo. I am really busy right now but vaguely recall that there was something on this in the Companies Act 2006? David also mentioned that his wife was helping him to run KAL. I have checked the file and she is not registered as a director with the company. I think we need to warn David about the implications of this for his wife. I told David I would get back to him later today. Can you draft me a letter dealing with these two issues that I can e-mail to him. You should make sure that I donâ€™t have to make any amendments to it as I wonâ€™t have the time. Thanks A Principal Only 1000 words Dear David As we had a discussion over the telephone and you had put forward a demand of another company to use that company as the financing company for cars so that your customers can buy on hire purchase. We had a long discussion about the process on which you were agreed. Thereâ€™s a thing that should be taken in attention is about the Companies Act 2006 clauses for the new company and the owner ship rules under the law. For the new company, the Companies Act 2006 has following clauses:
The CA 2006 presents two new limitations on eligibility to act as an organization director. The primary thing is that an individual must be no less than 16 years old on appointment (section 157 Companies Act 2006). Where an individual is less than 16 years old when section 157 comes into power â€“ in October 2008 â€“ he or she will be regarded to stop to be a chief as of that date and the organization will need to make the vital change to its register of directors. This is the first time that an age confinement has been forced on directors by UK organization law â€“ in a famous instance of the early twentieth century (the Marquis of Bute case) it was held that it was workable for a six-month old infant to be selected as director of a restricted organization.
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