We were introduced to the world of corporate registrations, mergers and acquisitions, and capital markets - the main aim being to elucidate on the reason behind a lawyer's request for documents, and to explain some of the jargon used. What do they need for a company search, and why would a trainee burn the midnight oil handwriting the names of shareholders into the company books?

We were assured that despite the mystery surrounding some of the requests, the process was in fact quite straightforward and follows well regulated steps.

Most of the regulation around the formation and actions of a company is governed by the Companies Act 1985 ("the Act"), and the presentation essentially centred on limited companies, both public and private which would be regulated by the Act. If a company remains unlimited it is usually because it does not want to be governed by this regulation. Many of the numbered forms submitted to Companies House correspond with the relevant section of the Act. Most public companies are larger, some of which will have been floated and listed on the stock exchange (PLC's), and private limited companies are generally smaller. However, there are some notable exceptions, e.g. Virgin, Littlewoods.

When a company is formed it is a legal entity in its own right and can own property or be sued, for example. To form a new company the following is required:

• Memorandum of association ("contract" between the company and the outside world)
• Articles of association ("contract" between the company and its members (shareholders). The articles document information about voting, who has the casting vote, procedure for resolutions etc. There is a set of 'model' terms known as Table A that companies can use and many companies will just adopt those. However, companies can vary these and also create their own).
• Form 10 (First directors and secretary and intended situation of registered office)
• Form 12 (Declaration on application for registration by solicitor or notary public etc)
• Fee

It might be worth noting that some organisations (such as Jordan's) provide ready made companies 'off the shelf' but this can be quite costly. Once the fee has been paid, the Registrar issues a certificate with the company number.

Ongoing corporate housekeeping includes board resolutions, shareholders' resolutions, meetings and written resolutions, allotment of shares - all documented via company forms such as 288a/b/c, 88(2), 123 etc. Not everything has to be filed: board resolutions are not publicly available but shareholders resolutions usually are for example. Section 380 of the Act outlines which ones should be filed. For example, if a company decides to spend 20% of itself to acquire a new company they may need to issue new shares to do that. Although the board will decide on such an action at some point it will need to be taken to the shareholders as they have to agree to it - it is the shareholders' resolution that is likely to be filed. A Prospectus (or listing particulars as it used to be called) must always be filed, as must any amendments to the Articles of Association. However, such amendments may be filed separately as a resolution - many companies will not re-draft and submit a consolidated version hence the need to piece together information to get a complete version of the Articles. Any of these documents when filed are typically referred to as circulars. It was interesting to note that the "company books" contain the written details of the shareholders names and technically a shareholder has no legal title unless they have been written up in the books, hence when a deal is happening and a company is acquired, the names of the shareholders need to be transferred into the books. This is why a trainee may find himself/herself handwriting them up in the dead of night to complete a transaction!

When a "company search" is required, lawyers typically want to see the latest memorandum and articles, the latest 363 (snapshot of the company at a certain date), any resolutions/forms filed since the 363, any issued share capital and shareholdings, and any charges (securities, mortgages, fixed or floating charges) the latter of which should be detailed in the latest accounts. There may be a requirement to do an insolvency check which may require telephoning the courts to make sure there are no recent winding up orders.

In discussing Mergers and Acquisitions, it was explained that in a private transaction there are four main transaction types:

• Share sales (literally when one company buys the other's shares outright, making the purchased company a subsidiary of the buyer)
• Asset sales (where a parts of a company are purchased but some are not, for example, all its properties. They may buy ongoing contracts but not ongoing litigation. This kind of deal is very complex and requires careful drafting of the terms which will set out exactly what is being purchased and what isn't)
• Joint ventures (a separate company is set up by two companies seeking to exploit a specific opportunity or act in co-operation. Their own business may carry on regardless).
• Private equity (a private company may bring in a venture capitalist to fund a new venture and the venture capitalist may take a percentage of profits or even some assets or take a degree of control in return for its investment).

Interestingly the terms of this type of agreement are not publicly available in the UK (the US file with the SEC). There is a section in the Prospectus that does have to list "material contracts" so sometimes a summarised agreement may be found there. Otherwise companies do have to put them "on display" but this is usually in their own office headquarters, so if the terms need to be known someone will have to physically go to the office and transcribe them (not photocopy them), hence this information is notoriously difficult to get hold of.

Initially, with any deal, there will be preliminary agreements drawn up which may consist of some or all of the following: heads of terms/memorandum of understanding, clauses regarding confidentiality and exclusivity/standstill (the latter to prevent gazumping situations). Confidentiality clauses protect the interests of either party, as they disclose information to each other, should the deal fall through. Due diligence follows where inspection of the other companies contracts and documents takes place to ensure they are representing their status correctly. The company will also provide warranties and disclosure, e.g. stating that they are not currently involved in any litigation, for example, or declaring what property they own. Finally, exchange takes place and completion may occur at the same time, or there may be a period prior to completion in order to satisfy certain conditions. An example may be the necessity of having to take the resolution to sell/buy to the shareholders for clearance.

When a PLC is the target of an M&A deal, the Takeover Panel's Code regulates the deal and each stage of the process. A takeover may be recommended, or hostile, and in the latter situation the buyer can usually only get hold of whatever information is publicly available, as the company being acquired will not necessarily offer all documents for inspection as it would in a recommended or friendly deal. The offer documents and prospectus (if there is a need to raise more money) need to be prepared. When a prospectus is drafted every detail must go through a verification process - statements such as 'this company is the leading company in the UK' etc must be substantiated and 'proved' with the production of back-up documentation.

Finally, we came to the money raising side of deals - Capital Markets. This part of the discussion helped explain some of the jargon - we've all probably heard of terms such as debt, equity and capital raising, but did we know what they mean? Again, Claire expertly took us through some of the terminology and explained to us, for example that a debt offering is a bit like selling an IOU with interest, whereas equity means selling shares and IPO refers to an initial public offering. When a company is trying to raise capital, a "placing" is where the company goes to the City, whereas an "open offer" is a hybrid situation when shareholders may be offered some shares and the rest placed on the open market.

Certainly by the end of the evening I felt I had a much better understanding of company terminology and documentation, and why it is needed for day-to-day business in a law firm. Again, I must acknowledge Claire Andrews for the information provided, and CLIG for organising such an informative evening.