Question 1

What are the two key pieces of legislation?

Accepted Answer

Companies Act 2006 Companies Act 1985

Question 2

Under CA 1985 what constitutional documents were required?

Accepted Answer

Articles and the Memorandum.

Question 3

Under CA 2006 what constitutional documents are required?

Accepted Answer

Articles only.

Question 4

Does a company incorporated under CA 2006 require a memo?

Accepted Answer

No, the memo no longer forms part of the company's constitution - it is only required as part of the procedure to register a company at Companies House.

Question 5

What is the purpose of the memo for a company incorporated under CA 2006?

Accepted Answer

It amounts to a declaration on the part of the company's subscribers that they wish to form a company and agree to become members of that company.

Question 6

What was the consequence of the Memo under CA 1985?

Accepted Answer

Companies were required to include an objects clause setting out the purpose for which the company had been formed. Acting outside of this purpose was described as acting `ultra vires' or outside of that company's capacity.

Question 7

What does it mean that Companies formed under CA 2006 have unrestricted objects?

Accepted Answer

Unless the objects are specifically restricted in the company's Articles, the ultra vires rule does not apply.

Question 8

Does the objects clause still apply to companies incorporated under CA 1985?

Accepted Answer

Yes, unless the articles are amended to remove the objects clause.

Question 9

What is the purpose of the Articles?

Accepted Answer

To regulate the relationship between the shareholders and the company.

Question 10

What types of provisions are included in the Articles?

Accepted Answer

The number of directors required to transact business (both to form a quorum at board meetings and to take decisions at board meetings); The method of appointment of directors; The powers of directors; How board meetings are to be conducted; Any special rights attaching to shares; How shareholder meetings are to be conducted; and How and to whom shareholders may transfer their shares

Question 11

What must the Articles comply with?

Accepted Answer

The minimum provisions of CA 2006 (this is known as the legality test).

Question 12

Can a company include more onerous procedures in it's Articles than contained in CA 2006?

Accepted Answer

Yes, for example, a private company must have a minimum of one director, but the Articles could provide for three.

Question 13

Are there some CA 2006 provisions that can't be overridden by the Articles?

Accepted Answer

Yes, for example, the right to demand a poll vote at a GM.

Question 14

What are the three types of Articles?

Accepted Answer

Model Articles Amended MA Articles Tailor made Articles

Question 15

How does a company amend its Articles?

Accepted Answer

Special resolution

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The company’s constitution Flashcards

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