You are a trainee solicitor at Ulaws LLP, of 1 High Street, Cheston, CH4 1TS. You have received the attached email and documents from Simon Dexter, your supervisor. Carry out the instructions set out in Simon’s email.

To: [You]
From: Simon Dexter (
Sent: 4 January 2021
Subject: Outdoor Dreams Limited (ref 15962.45)

Dear Trainee,
We have been instructed by Outdoor Dreams Limited (‘the Company’). The Company is a garden centre which has diversified into outdoor furniture, hot tubs and garden design. It has also enjoyed a lot of success by running classes in horticulture, garden design, flower arranging etc. A Company information sheet is attached as Document

The Company has agreed to buy Celia Vickers’ business, Radagast Woodcarvery (‘RW’). Celia set up her business as a sole trader 5 years ago, offering wood carving tuition. The directors feel that RW will be a good fit with the Company’s existing operations. RW is valued at £150,000 and the Company will offer Celia 25,000 ordinary £1 shares (each worth £5) and 5,000 £5 cumulative non-participating 5% preference shares, in return for the business.

All of the directors are happy with the deal agreed. Celia is speaking to her accountant later this week as she was concerned about the capital gains tax consequences. If she is happy to proceed the deal will go ahead as soon as possible.

John wants to know what resolutions will be required to implement the deal and whether the tax consequences are likely to change Celia’s mind about selling RW to the Company. I met John whilst we studied the LPC together and although he never qualified he is well versed in company procedure so just needs a reminder of the resolutions required rather than the full company procedure. Please give him the relevant authorities from the Companies Act 2006.

NB: No shareholders’ resolutions have been passed to date which would affect your answer.

Please prepare a draft letter to John Abrahams explaining:
• Which members’ resolutions must be passed and an explanation of why, and
• Whether Celia will face a large CGT bill if she sells RW to the Company, or if she sells her shares in the Company at a later date. We obviously do not act for Celia so we are not calculating the CGT due. John just wants to know whether any reliefs will be available to Celia. Please note that John has authority from the Company to instruct us and you should write to him at the Company’s registered office.

Kind regards,