Chapter No.14:Constitution of a company

Question 1

What is constitution of a company?

Answer 1

A company’s constitution comprises of articles of association and any resolutions and agreements it makes which affects the constitution

Question 2

What is resolution?

Answer 2

Resolutions are legal decisions of members which directly affect the company’s constitution

Question 3

What is a memorendum?

Answer 3

When a resolution or agreement is not in writing, the company is required to send a written record to registrar which is called a memorendum

Question 4

How an article is amended?

Answer 4

With a special resolution(and should be for the benefit of the company as a whole)

Question 5

How certain articles in a constitutions can be made unalterable?

Answer 5

1)By giving members additional votes
2)Setting a quorum
3)Entrench provisions(means specific provisions may only be altered when specific conditions are met)

Question 6

Do Companies Act override company’s articles?

Answer 6

Yes

Question 7

How a company can restrict its activities?

Answer 7

By including those restrictions in the articles

Question 8

What is ultra vires?

Answer 8

When a company exceeds its objects and acts outside its capacity

Question 9

The articles constitutes a contract between which two parties?

Answer 9

Company amd members

Question 10

What are the statutory rules on company name?

Answer 10

The names must end with
1)Plc(if it is a public limited company)
2)Ltd(if it is a private company)
3)May not have a name which is the same as any other company
4) May not use a name which would be a crimial offence