ARTICLES OF ASSOCIATION – MAJOR CHANGES MEANS THEY MUST BE REVIEWED

Is your business incorporated as a limited company? (whether public or private, limited by shares or guarantee) - then you need to ensure that the Articles of Association are reviewed as soon as possible. The Articles are the regulations governing the mode of conducting the business and its internal organisation. The Memorandum of Association sets out the purposes for which the company was formed and its capital. The Companies Act 2006 is gradually replacing the Companies Act 1985 over a period of time and the next significant date is 1st October 2009. On this date, the 2006 Act provides that the Memorandum will become a more simplified document only required to be presented at registration. It is the New Model Articles of Association (which will apply by default to all new companies which are incorporated on or after 1st October 2009 unless they register their own) that may cause problems for existing companies. The changes brought in by the Act means that there are various provisions in the Articles of existing companies which may be overridden by the new law. An example being, director’s duties and authorisation of transactions where there are conflicts of interest, to which I referred in my previous update. However, it is not all bad news, there is additional flexibility in the some provisions of the new Act which can be used to a company’s advantage.

If you should need help or further guidance then you should contact me by clicking on the link in the panel to the right of this Update