Are Model Articles up to the job?
Read on and you may be surprised!
The new Model Articles for private companies limited by shares (Model
Articles) now contain only 53 separate articles compared to the 118 regulations
contained in Table A to the Companies Act 1985.
So what has been left out or changed?
- The Model Articles no longer provide for a director to appoint an alternate to attend
meetings and vote in his absence.
- Directors can now take unanimous decisions informally, for example by text message.
- The Model Articles prevent a director who is interested in a contract with the
company from participating in the meeting at which the contract is discussed for
quorum or voting purposes, except in very limited circumstances. They are more
restrictive than the provisions of the new Companies Act 2006 (the Act) itself.
- The Model Articles only provide for a company to issue fully-paid shares, not nil
paid or partly paid shares.
- The Model Articles contemplate that a company will only have one class of shares:
they therefore don't include any authority for directors to allot shares. If you wish
now or in the future for the company to have more than one class of shares, you
will need to include express authority for
the directors to allot shares.
- Provisions dealing with the calling and operation of general meetings are now set
out in the Act rather than the Model Articles.
- The Model Articles no longer provide for companies to hold Annual General Meetings.
- The Model Articles envisage that the company will not have a company secretary.
On this basis, are the Model Articles the most suitable form for your company's
constitution?
If not and you would like to discuss whether you should be looking to amend or remove
any provision of the Model Articles or include any provision currently not found in the
Model Articles, please contact us.
Check a company name