Business Law: Memorandum and Articles
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Business Law: Memorandum and Articles The Companies Act provides that, as regards each of the various types of company, these documents shall be in the form specified by regulations made by the Secretary of State "or as near to that form as circumstances admit". This, however is treated with considerable latitude and so long as the documents submitted are in the same basic form as that specified and contain what the Act prescribes, the widest variations of content are permitted. Thus, as we shall see, the practice has long been to produce memoranda much lengthier than the prescribed forms because of inflated objects clauses-a practice which conceivable may change as a result of the reforms of the ultra vires doctrine by the Act of 1989. The present Regulations contain five Tables of which Table A, prescribing model articles for a company (whether public or private) limited by shares, is the most important and differs in its effect from the others.
For the articles the draftsman will also require to know if the shares are to be all of one class and, if not, what special rights are to be attached to each class, as these should be set out in the articles, but preferably not in the memorandum. The capital of a public company will have to be not less than the authorized minimum. 3. Any other special requirements which deviate from the normal as exemplified by the appropriate Table. The most likely matters are quorums, and the minimum and maximum numbers of directors. With the aid of this information the draftsman should have no difficulty in preparing drafts based on precedents from his own experience; reference books and the Tables. Moreover, most law stationers have their own standard forms set up in print, adaptation of which will reduce printing charges. The main question for consideration is the extent to which Table A is to be adopted.
By so doing, the company's officer will not be faced with the task of extracting its regulations from two separate documents, one of which, Table A, may become progressively less accessible-for it will be appreciated that it is the Table extant at the time of incorporation which continues to govern. Adoption of Table A is therefore often a false economy, particularly as the larger firms of company solicitors have their own standard forms which are kept in print by their stationers, thus minimizing the costs to their clients. In case of a company whose memorandum states that its registration office is to be in Wales it is now permissible for the memorandum and articles (and other documents that have to be delivered for registration) to be in Welsh, but they have to be accompanied by certified English translations when delivered for registration or be translated into English by the Registrar. The distinction between the memorandum and the articles of association has already been dealt with. The effect of the two documents as between the members and the company will be considered later.
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