Constitution of a Company

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  • Created by: Edward
  • Created on: 15-03-17 22:43
CA 2006, s 16(2)
‘incorporation’ = used because successful incorpn brings ito existence a ‘corpn’ – or ‘body corporate’
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CA 2006, s 9
Docs reqd for constitution = the memorandum of assn and an application for regn
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CA 2006, s 9
Applicn for regn should include: (2)(a)companys prop name;(5)(a)address;(2)(d)pub or priv;(2)(c)liability limited or not;(4)(b)statement of guarantee
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CA 2006, s 15(4)
If Registrar satisfied that docs are complete and acc, he will, upon payment of the regn fee, issue a certificvate of incorpn, which provides conclusive proof that the company’ is validly regd under CA 2006
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CA 2006, s 16
From date of incropn, company has all powers and obligns of a regd company, and the proposed directors will formally become directors, subj to range of statutory duties
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The Café Olympic case (2011)
Highlights how name changing after regn could lead to absurdity and ruin businesses
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Exxon Corporation v Exxon Insurance Consultants International (1982)
Passing-off action – court granted injn to oil company restraining insurance company from using ‘Exxon’ in name
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CA 2006, s 53
It is not possible to register a company with name which would constitute crim offence or be offensive in Sec of State’s opinion
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CA 2006, s 54
Sec of State’s approval reqd where name would give impression connection with Govt or any local authority
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CA 2006, ** 54-56
Specified list of words which need approval e.g. Police/Wales/Queen/Great Britain need Sec of State’s approval
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CA 2006, s 57
Names could even be prohibited on basis of accents and punctuations /letters or characters
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CA 2006, s 77
During company’s life, members may only change company’s name by special resolution
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Re Noel Tedman’s Holdings (1967)
Members can come and go, but the company remains (Australian case)
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Lee v Lee’s Air Farming (1961)
Widow entitled to comensation – L had not made contract with himself – made it with company which was sep entity – despite owning virtually all shares
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Macaura v Northern Assurance (1925)
Insurance company entitled to refuse payments as, whilst timber was insured in M’s name, timber did not belong to him
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Walker v London Tramways (1879)
A company cannot make its articles unalterable
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Greenhalgh v Ardene Cinemas (1957)
‘the company as a whole’ = the shareholder as a body and the court should take the case of hypothetical member and ask whether alteration was for his benefit
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Allen v Gold Reefs of West Africa (1900)
Lindley MR: power to alter articles must be exercised subj to those gen principles of law and equity which are applicable to all powers conferred on maj’s and enabling them to bind minorities – it must be exercised, not only in the manner reqd by law
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Shuttleworth v Cox Brothers (1927)
Lindley MR’s test = predy subj; if the maj shareholders honestly believed that the alteration was for company’s benefit as a whole, then the alteration would be valid, even if the court disagrees with the maj’s assessment
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Peters’ American Delicacy v Heath (1939)
Lindley MR’s test so vague almost meaningless
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CA 2006, s 25
A member is not bound by any change in articles made after he became member if effect of change is to require him to take or subscribe for more shares than the amount he had at the date of the alteration, unless he expressly agrees in writing to the
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CA 2006, ** 97 and 98(6)
In certain situations, statute empowers court to prohibit a company from altering its articles w/out court’s permission (e.g. where the members of a public company object to it re-registering as private)
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CA 2006, s 21(1)
A company may amend its articles by passing a special resolution and, in certain cases, the courts also have the power to amend the articles
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Jetivia SA v Bilta (2015)
Where the directors use the company tyo conduct some manner of unlawful activity, the unlawful activity will not be attributed to the company for purposes of providing directors with defence (e.g. defence of illegality)
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Lennard’s Carrying v Asiatic Petroleum (1915)
Courts will only attribute to company the knowledge of persons who constitute the ‘directing mind and will of the company’ (in maj cases, this will be limited to directors and senior officers of company, and to persons in management to whom the direc
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R v ICR Haulage (1944)
As a company cannot be imprisoned, it cannot be found guilty of any crime for which only punishment is imprisonment (e.g. murder)
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CA 2006, s 17
Company’s constitution will include: company’s articles, and resolutions and agreements affecting the company’s constitution
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CA 2006, s 7(1)(a)
All companies must have a memorandum
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CA 2006, s 8
Mem must state that subscribers: wish to form a company under the Act, and agree to become members of the company and, in case of a company with a share capital, to take at least one share each
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CA 2006, s 18(1)
Every company must have a set of articles
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CA 2006, s 20(1)(b)
Even if promoters do register their own articles, the relevant model articles will still form part of the company’s articles, unless its regd articles modify or exclude them
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Holmes v Keyes (1959)
The arts of assn of the company should be regarded as a business doc and should be construed so as to give them reasonable business efficiacy
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Thompson v Goblin Hill Hotels (2011)
Words of articles are not to be given plain and obv meaning if such an interpretation would provide commercial absurdity
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CA 2006, s 20(1)
Where promoters of a limited company do not submit their own articles upon regn, the applicable model articles will form the company’s arts
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CA 2006, s 29(1)(a)
Any special resolution will form part of company’s constitution – even though many spec resnss will involve decisions that have no bearing on company’s constitution
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CA 2006, s 33(1)
Provns of a company’s constitution in bind the company and its members to the same extent as if there were covenants on part of the company and of each members to observe those provns
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Eley v Positive Government Security Life Assurance (1876)
Company may very well have breached articles, but as E was not party to the stat contrat, he could notr sue for such a breach
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Bratton Seymour Service v Oxborough (1992)
S 33 stat contrat cannot be defeated on grounds of mistake, misrep, duress or undue influence
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Scott v Frank F Scott (1940)
S 33 contract: courts will not rectify stat contract, if it fails to give effect to parties’ intention, or if it contains a mistake
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Pender v Lushington (1877)
Shares were properly transferred and regd to nominees, so refusing to accept their votes const’d a breach of the articles – thus, court issued inj’n restraining rejection of nominees’ votes
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Hickman v Kent or Romney Marsh Sheepbreeder’s ***’n (1915)
Company enforced const’n against one of its members
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Rayfield v Hands (1960)
As company here was a a quasi-partnership, the article provns affected the directors in their capacity as members
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Bisgood v Henderson’s Transvaal Estates (1908)
Buckley LJ: the purpose of the const’n = to define the position of the shareholder as shareholder, and not to bind him in his capacity as an ind
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Beattie v E and F Beattie (1938)
Could only enforce/rely on articles if in capacity of member and not as director
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Ashbury Railway Carriage and Iron v Riche (1875)
Objects clause limit contractual capacity of a company and if a company entered into a contract that was outside scope of its objects clause, the company would be acting ultra vires (‘beyond one’s poers’) and the contract would be void ab initio
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CA 2006, s 31(1)
Reqt of an objects clause has been abolished (although companies can still have them)
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CA 2006, s 39(1)
The validity of an act done by a company shall not be called into q’n on ground of lack of capacity by reason of anything in the company’s constn
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CA 2006, s 40(1)
In favour of a person dealing with a company in good faith, the power of the director to bind the company, or authorises others to do so, is deemed to be free of any limitation under the company’s const’n
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Other cards in this set

Card 2

Front

Docs reqd for constitution = the memorandum of assn and an application for regn

Back

CA 2006, s 9

Card 3

Front

Applicn for regn should include: (2)(a)companys prop name;(5)(a)address;(2)(d)pub or priv;(2)(c)liability limited or not;(4)(b)statement of guarantee

Back

Preview of the back of card 3

Card 4

Front

If Registrar satisfied that docs are complete and acc, he will, upon payment of the regn fee, issue a certificvate of incorpn, which provides conclusive proof that the company’ is validly regd under CA 2006

Back

Preview of the back of card 4

Card 5

Front

From date of incropn, company has all powers and obligns of a regd company, and the proposed directors will formally become directors, subj to range of statutory duties

Back

Preview of the back of card 5
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