COMPANY LAW:

Company Law

Company Law

The company's constitution was previously divided between the Memorandum of Association (external aspects) and the Articles of Association (internal aspects, including the balance of power between the board of directors and the general meeting). The Memorandum is now simply a statement of the subscribers' intention to form, and become members of, a company. The information previously contained in the memorandum is in application documents for registration sent to the Registrar of Companies including: (a) company's proposed name; (b) situation of the registered office; (c) whether the members' liability is limited by shares or by guarantee; (d) whether the company is private or public: CA 2006, s. 9.

Referring to the variation of S 630 Companies act 2006 Where the alteration of the articles constitutes a variation of class rights, the alteration cannot be made under s. 21(1) but only in accordance with s. 630 which requires alteration in accordance with provision in the company's articles for the variation of those rights or, where the articles contain no such provision, if the holders of shares of that class consent to the variation either by (i) consent in writing of the holders of three-quarters of the issued shares, or (ii) a special resolution at a separate class meeting: Cumbrian Newspapers Group Ltd v Cumberland & Westmorland Herald Newspaper & Printing Co Ltd [1986] BCLC 286.

2- The options open to Linda depend on the following a liquidator, creditor or contributory to petition the court to examine the conduct of any officer of the company (as well as an office holder or anyone involved in the promotion, formation or management of the company) who has misapplied or retained or otherwise become accountable for any money or other property of the company or has been guilty of misfeasance or breach of fiduciary duty in relation to the company. The court can then order the repayment of any money or order such contribution to the assets of the company as is just. The legal issue here is that the company has the statutory power under s. 21(1) to alter its articles and it has been held that this statutory power cannot be restricted contractually.

The company must have been able to bring the same claim - in effect in allows, typically, a liquidator, to stand in the same position as the company. Equally, in a claim for misfeasance or breach of duty that must cause loss to the company: as Chadwick LJ said in Cohen v Selby [2001] “The court has to be satisfied that the negligence caused the loss in respect of which compensation can be awarded. The position, in this respect, is the same as it would be if the company had brought an action in its own name.” ED Games Limited concerned a claim against a director that he had not paid VAT liabilities. The director contended that the mere non-payment of VAT causes no loss to the company. That is, of course, ...