covenant

constitution

Memorandum of association
* The memorandum is a simple documentwhich states that the
subscribers wish to form a company and become members of
it.
*But now all of the info contain in (Memorandum of
association) is available now in Articles of Association
*
more important document under previous company legislatio
n
*it's nt possible to ammend it

company's constitution
* A company's constitution comprises the

i: Articles of Associationand
ii:Resolutions and Agreements

Resolutions and agreements

* Resolutions are decisions passed by members
* they are used to introduce, amend or remove provisions in the
articles
* Agreements made between the company and members
* Copiesof resolutions or agreements that amend the constitution
must be sent to the Registrar within 15 days

Articles of association
* articles of associationconsist of the internal rules that relate to
the management and administration of the company.
*Rules how the company is to be managed and administered

Model articles
*Default
three model articles which cover the following companies:
private companies limited by guarantee
public companies
private companies limited by shares

*Different models are available for companies and compnies are

free to use any model
*may adobt the full model r half
*if company fail to adopt any model than default model will use
at time of incorporation

Contents of Articles
*articles should be contained in a single document which is divide
d into
consecutively numbered paragraphs

Articles should contain rules on

Appointment and dismissal of directors
Powers, responsibilities and liabilities of directors
Director's meetings
Member's rights
Dividends
Communication with members
Issue of shares
Documents and records
*
This means that the articles form a statutory contract between th
e company
and its members, and between the members themselves,even if t
hey do not
sign them

Alteration of articles
*A private company may pass a written resolution with a 75%
majority
General rule

*can alter by special resolution (75% majority)

*copies must send to registrar within 15 days

Restrictions on alteration
*alteration is void if it conflicts with the Companies Act
*protect a minority, the court may order

Expulsion of minorities
****Whenever any alteration is made to the articles a copy of
the altered articles must be delivered to the Registrar within 15
days, together with a signed copy of the special resolution
making the alteration.

Interaction of statute and articles

*The Companies Act may permit companies to do something if
their articles also authorise it. For example a company may
reduce its capital if its articles give power to do this.
*If they do not, then the company must alter the articles to
include the necessary power

Company objects and capacity

*A company's objects are its aims and purpose
*If a company enters into a contract which is outside its objects,
that contract is said to be ultra vires
*The objects could now be found in the articlesbut most articles
will not mention any objects.

Alteration of the objects

*may alter its objects by special resolutionfor any reason

Contractual capacity and ultra vires

Companies may only act in accordance with their objects. If
the permit an act which is restricted by the company's objects
then the act is ultra vires

Company name and registered office

Statutory rules on the choice of

company name
i: No company may have a name which is the same as any other
company

Omission of the word 'limited'

A private company which is a charity or a company limited by
shares or guarantee and licensed to do so before 25 February
1982 may omit the word 'limited'

conditions to fullfil
i:objects of the company must be the promotion of either
commerce, art, science
ii: articles must require that the profits or other income of the
company are to
be applied to promotingits objects

Change of name
A company may decide to change its name by:

(a) Passing a special resolution

(b) By any other means provided for in the articles

Passing-off action
the law defend a company using its name

Appeal to the Company Names

Adjudicators
t he Adjudicator will review the case and, within 90 days, make
their decision and provide their reasons for it in public.

Business names other than the

corporate name
* A business name is a name used by a company which is
different from the company's corporate name or by a firm
which is different from the name

Register office
*The Companies Act 2006 provides that a company must at all
times have a registered office
to which all communications
and notices can be sent
*to change must inform in 14 days

* The articles may be altered by a special resolution. The basic

test is whether the alteration is for the benefit of the company as
a whole

* The articles constitute a contract between:

Company and members
Members and the company
Members and members
* The members are able to compel the company to obey the
Articles
* This enables a minority shareholder to protect their interests
against
of the majority.