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Companies Act 2006 - do we need to change our memorandum and articles?
18 September 2009
The provisions of the Companies Act 2006, which fundamentally
change the structure of the memorandum and articles of association
of companies, come into force at the start of October this
year.
The 2006 Act does not include any specific requirement for a
company to amend its memorandum and articles of association but, it
does introduce a number of significant changes to company law which
mean that companies should seriously consider updating their
constitution.
What will these changes mean?
Such changes would allow a company to:
- remove redundant or inconsistent provisions and out of date
references to the 1985 Act, Table A or earlier
legislation
- ensure that the provisions of the 2006 Act do not affect the
validity of any existing provisions of the articles
- take advantage of some of the new provisions of the 2006 Act,
particularly some of the relaxations for private companies, for
example:
- the use of email and the internet to
communicate with members
- the abolition of the requirement to
have a company secretary or an AGM
- easier ways of allotting new shares
or changing the name of the company
- remove any unnecessary restrictions,
for example:
- 'objects' clauses are no longer
required, but will continue to restrict the company unless they are
removed
- companies no longer require an
'authorised' share capital in addition to an 'issued' share capital
provided their articles are amended appropriately
- add additional restrictions where
increased flexibility is seen as undesirable, e.g. in the case of
charities or similar organisations
talk to us
We would be happy to talk to you about any of these issues in
more detail or to carry out an initial review of your company’s
articles so that you can decide whether to update your
constitution.
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