Constitution of a company

  • Created by: Lucy
  • Created on: 18-07-15 20:13
What is a memorandum
simple document which states that the subscribers wish to form a company and become members of it. Therefore a statement of historical record.
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What does S.86 CA 2006 state ?
that a company must have a registered office to which all official correspondence can be sent.
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Which 3 statutory books must be kept at registered office ?
Directors + Secretary, Charges, Minutes of general meetings
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Which business documents must include the address
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If directors change actual address who must they notify
Registrar - notify of any changes
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What is the Objects Clause
Sets out what the company was formed to do - it is to protect shareholders from reckless directors.
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Ulta vires
outside the capacity of the company
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Contracts made outside the objects clause were deemed as what ?
Ulta vires and void. Such contracts were unenforceable by either party.
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What does S.31 CA 2006 state
that a company's objects are completely unrestricted
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Most articles won't mention objects unless what ?
the company wish to restrict it's activities in some way.
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What is the main aim of the legislation - objects clause
to protect 3rd parties who deal with the company
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What does S.39 CA 2006 state
Validity of an act done by a company shall not be called into question on the ground of lack of capacity by reason of anything in the company's constitution. This protects 3rd parties who enter into contracts with company
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What does S.40 CA 2006 state
In favour of a person dealing in good faith with a company, the power of the board of directors to bind the company or authorise others shall be deemed free of any limitation under the company's constitution. (not just object clause)
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What does S.21 CA 2006 state
Alteration of the Objects clause. Special resolution with copy of the resolution to be sent to registrar within 15 days of meeting
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What is the content in relation to the topic Share Capital and Shares
Company has capacity to issue new shares on passing of ordinary resolution. Allow + register share transfers, can buy back its own shares.
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What is the content in relation to the topic meetings
Can only conduct business if a quorum is present
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What is the content in relation to directors
Minimum is 1 in private,co., 2 in plc, no maximum. Directors have delegated authority to exercise all the powers of the company, unless restricted by CA 2006 or, constitution or articles or special resolution
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What is the content in relation to the topic dividends
Directors decide
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What is the content in relation to the topic notice to memebers
Directors responsibility to call meetings + issue notice.
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What does S.33 CA 2006 state
The articles, and constitution, bind the company + its members in contract as if each had signed these documents as a deed.
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Hickman V Kent Or Romney marsh sheep breeder association
H bound by clause in articles which provided for arbitration in the event of disputes between company + members.
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Pender V lushington
L, Chair of meeting, prevented P from voting. This was held to be a breach of contract between the company + members.
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Rayfield V Hands
Articles required member directors to acquire shares of any member who wished to sell. Directors, in their capacity as members were forced to honour agreement.
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Eley V postitive life assurance Co.
The articles don't constitute a contract between the company and 3rd parties. E, solicitor, member + drafter of articles, inserted a clause appointing himself solicitor to company for life. Held: Uneforceable, didn't relate to E's membership rights.
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What is a special resolution
At least 75% majority, of those members who attend meeting + vote
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Which company can pass a written resolution with a 75% majoirty
A Private
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What does S.22 CA 2006 allow
companies to entrench provisions in its articles, requiring alteration to be agreed by a larger majority 100% members.
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What provision can't be drafted
The articles can never be amended or removed
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What are the restictions on alterations
conflicts with Companies Act or Constitution, can't be used to compel a member to take more shares, made with retrospective effect, must be in interest of company as whole, not prevented because alteration inflicts hardship on member/s
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Grenhalgh V arderne cinemas
Articles allowed members to sell shares to third parties without first offering them to other members. Held: alteration allowed as members as a whole were better off even though G unhappy at losing automatic right to buy shares.
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Shuttleworth V cox brothers
Alteration allowing expulsion of members who was defrauding company was allowed
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Southern foundaries V shirlaw
Alteration allowing removal of MD valid but MD can sue for breach of contract.
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What is weighted voting rights
possible to effectively freeze provisions in the articles to certain procedures
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What can a company name not be
The same as one that already exists, offensive, illegal .e.g. bank can't be used unless it is a bank, name that requires consent from secretary of state, sensitive .e.g. Royal unless a ltter of non-objection has been obtained from relevant body.
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To change the name you require what ?
Special resolution (75% majority in general meeting) or by any other means provided for in the articles, e.g. ordinary resolution
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What is the time limit if name is too similar to another
within 12 months registration
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What is the time limit if misleading information is provided ?
within 5 years
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What the time limit if the name could harm the public
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Does changing the name of a company affect any of the company's pre-existing rights or obligations
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Where must you have disclosure of the name of the business
Inside registered office + all places of business, on all business letters, notices + official publications, on cheques, orders, receipts + invoices
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What is the meaning of Passing off
Conducting a business in such a way as to confuse the public into thinking it is that of another person.
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For passing off to happen there must be what
Genuine risk of confusion
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The aggrieved company can appeal where ?
To the Company Names Adjudicator - they will make a decision within 90 days
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Claim will fail is
word is one in everyday use
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Appeals against Adjudicator's decision can be made where ?
To court which may reverse or affirm the Adjudictor's decision or may determine a new name
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What remedies are there
Damages, and/or an injunction to prevent further abuse.
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United Biscuits (penguin bar) V asda
United biscuits, successfully claimed a genuine possibility of confusion when Asda sold their own version of a chocolate covered biscuit under the name Puffin.
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Other cards in this set

Card 2


that a company must have a registered office to which all official correspondence can be sent.


What does S.86 CA 2006 state ?

Card 3


Directors + Secretary, Charges, Minutes of general meetings


Preview of the back of card 3

Card 4




Preview of the back of card 4

Card 5


Registrar - notify of any changes


Preview of the back of card 5
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