ARTICLES OF ASSOCIATION

Articles of Association

Table of Contents

Introduction3

Thesis Statement3

Discussion4

The Companies Act 20069

Conclusion12

Bibliography14

Articles of Association

Introduction

The Joint supply businesses precede 1844, which enabled companies to be formed by "deed of town" and the restricted Liability Act 1855 established a general incorporation method which suggested limited liability to shareholders and gave recognition to the business as a distinct lawful persona. By the junction Stock businesses Act 1856, the deed was restored with today's style of constitution, namely the registration of the Memorandum of Association and the Articles of Association. The contents of these are now regulated under the Companies proceed 1985, and pattern the "constitution" of the company. It is from the initial 1844 proceed that the wording was adopted for s.14 of the Companies proceed 1985 which makes quotation to the contractual nature of the memorandum and items between the business and its shareholders.

Thesis Statement

"Subject to the provisions of this proceed, the memorandum and pieces, when recorded, attach the enterprise and its constituents to the equal span as if they respectively had been signed and shut by each constituent, and comprised covenants on the part of each constituent to observe all the provisions of the memorandum and of the articles." s.14 businesses advance 1985

Discussion

The memorandum agreements with the external workings of the company. It has a specified minimum content in accordance with CA 1985, which includes the company's name, domicile, objects, and extent of liability and share capital of the company. In contrast, the articles regulate the internal workings of the company and can be drawn up by the founders of the company (or can be taken from Table A of the Companies Regulations 1985) and state the rights and obligations of the company and its shareholders.

Also occasionally advised part of the constitution is a shareholders affirmation, which binds the parties under usual contract law. If dropping under the statutory provision in s.380 (CA 1985), the affirmation must be listed in the identical way as the memorandum and items, though clauses in the shareholders agreement will not disobey statutory provisions. In the case of Russell v Northern Bank Development Corpn Ltd, the House of Lords supported a shareholders' affirmation on the cornerstone that it could be understood as a voting agreement, even though it pertained to a limit on increasing the share capital of the company.

Although s.14 concerns to both the memorandum and the articles, it is usually the interpretation of the provision pertaining to the company's articles, that has become the origin of much debate and controversy. Confusion is centered on two areas - who are the parties to the constitution and what rights are conferred on them?

Section 14 (CA 1985) makes it clear that there is a contract between the business and its shareholders. However, different a commercial agreement in which the rights and obligations of both parties to enforce the contract are equal, and, when breached would entitle either party to search judicial remedy, the agreement between a business and its shareholders is not so ...