A guide to the Model Articles and their key provisions. The Model Articles are the most common form of articles for companies in the UK, as they are applied to all companies by default, unless the company chooses to adopt other articles. The Companies (Model Articles) Regulations 2. Pursuant to section 2. Companies Act 2. 00. If the company does adopt bespoke articles which don’t exclude or modify the relevant model articles then the relevant model articles will (so far as applicable) form part of the company’s articles of association.
Buy a model articles of association. The Great Recession of 2008-2009: Causes, Consequences and Policy Responses IZA DP No. 49 Sher Verick Iyanatul Islam. Following events in 2008. Companies (Model Articles) Regulations 2008 (SI2008/3229), apply as the articles of association of the Company. 1.2 Definitions and interpretation. Http:// Actions., 'objName' : 'The Companies (Model Articles) Regulations 2008 (SI 2008/3229)'.
Consequently, the model articles are the most common form of articles for companies incorporated since 1 October 2. Although it should be decided on a case by case basis, the model articles are most applicable to small companies where there is little risk of a dispute between either the shareholders or the shareholders and the directors. Set out below is a summary of the main provisions included in the Model Articles for private companies limited by shares (for the purposes of this article, the “Model Articles“) which are fully set out in schedule 1 of the Companies (Model Articles) Regulations 2. The Model Articles were updated as of 2. April 2. 01. 3 and for a companies incorporated on or after 2.
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April 2. 01. 3 with the Model Articles, the new version will apply. The new version has deleted article 1. For companies incorporated between 1 October 2. April 2. 01. 3 (inclusive) the old Model Articles will apply that can be found here. For companies incorporated on or after 2.
April 2. 01. 3 the New Model Articles will apply that can be found here. Shareholders’ Reserve Power (Article 4)By a special resolution (ie a resolution requiring 7. Number of Directors (Articles 7)The Model Articles do not contain any minimum or maximum number of directors. If there is only one director then that director may take decisions without regard to any of the provisions of the articles relating to directors’ decision- making. Decision Making by Directors (Articles 7- 8)The general rule about decision making under the Model Articles is that decisions should be taken unanimously or by a majority decision at a meeting of the directors. It is important to note that a majority decision cannot be made by the directors other than at a properly called directors’ meeting. Directors’ Meetings (Articles 9- 1.
A directors’ meeting can be called by any of the directors or the company secretary (if appointed) by giving notice to each of the other directors. A directors’ meeting will be validly held if: – the meeting has been called and takes place in accordance with the articles; and– each director can communicate to the others any information or opinions they have on any particular item of the business at the meeting. This means that a meeting held by tele- conference or video- conference will be validly held if it meets the other relevant requirements. The quorum for a directors’ meeting is two unless it is otherwise fixed by a decision of the directors (but it must never be less than two). The directors’ may appoint a chair of the meeting in which case the chair will have a casting vote if the vote on a decision is tied. Conflicts of Interest (Article 1. Section 1. 77 Companies Act 2.
Article 1. 4 of the Model Articles states that, if a director is so interested in a proposed transaction then that director shall not be counted in the quorum and their shall not vote on the matter unless: – the shareholders have disapplied the relevant provision in the articles; – the director’s interest cannot reasonably be regarded as likely to give rise to a conflict of interest; – the director’s interest came about because of: a guarantee. Such a situational conflict can be authorised by the independent directors if nothing in the company’s constitution prohibits it and, as the Model Articles are silent on this area, this power does lie with the independent directors. Appointment of Directors (Article 1. A new director may be appointed by an ordinary resolution of the shareholders or by a decision of the directors. Shares (Articles 2. Other than the subscriber shares issued on incorporation, all shares must be fully paid up.
The Model Articles only provide for ordinary shares to be issued, but they do permit shares of different classes to be issued with such rights or restrictions as may be determined by an ordinary resolution or the shareholders. The company must issue, free of charge, a share certificate to each shareholder and, subject to certain conditions, must issue a replacement certificate if that certificate has been damaged, defaced, lost, stolen or destroyed. Upon a transfer of share(s), the instrument of transfer needs to be lodged with the directors for registration. The directors may refuse to register the transfer of a share, and if they do so, the instrument of transfer must be returned to the transferee with the notice of refusal unless they suspect that the proposed transfer may be.
Section 7. 71 Companies Act requires that the directors must give reasons for the refusal to register the transfer and failure to comply with this requirement is an offence. Dividends and other Distributions (Articles 3. A final dividend must be first recommended by the directors and then authorised by an ordinary resolution of the shareholders. An interim dividend may be paid following a decision of the directors.
Any dividend must be declared and paid in accordance with the shareholders’ respective rights and, unless the shareholders’ resolution or directors’ decision or the terms on which the shares were issued, specify otherwise, a dividend must be paid by reference to each shareholders’ holding of shares on the date of the resolution or decision to declare or pay it. Unless specified in a separate agreement or in the terms on which the share was issued, no interest shall accrue on a dividend. If they are so authorised by an ordinary resolution of the shareholders, the directors may decide to capitalise any profits of the company which are not required for paying a preferential dividend, or any sum standing to the credit of the company’s share premium account or capital redemption reserve. Such capitalised sum should be used for the benefit of the same persons and in the same proportions as would otherwise have been the case for either: (a) .
The following relates to general meetings of the shareholders. The notice provisions for general meetings are included in the Companies Act 2. Model Articles. The directors may make whatever arrangements they consider appropriate to enable those attending a general meeting to exercise their rights to speak or vote at it.
The Model Articles are drafted widely so that if a person is able to communicate to the others and vote then they shall be counted as attending and voting at the meeting. Consequently, attendance by phone or video link is permitted. The Model Articles do not set a quorum for a general meeting and therefore the quorum is two qualifying persons (section 3. Companies Act 2. 00. If a quorum is not present within half an hour of the time at which the meeting was due to start or if during the meeting a quorum ceases to be present, the chair must adjourn the meeting.
There must be a chair of the meeting (which shall be the chair of the directors if they have appointed one and they are willing to act) but the chair does not have a casting vote. Directors may attend and speak at a general meeting by right and the chair of the meeting may permit other persons to attend and speak at a general meeting. Voting at General Meetings (Articles 4. Unless a poll is demanded, a resolution put to the vote of a general meeting must be decided on a show of hands. There is no automatic. The relevant liabilities that can be indemnified are: any liability incurred by that director in connection with any negligence, default, breach of duty or breach of trust in relation to the company or an associated company; any liability incurred by that director in connection with the activities of the company or an associated company in its capacity as a trustee of an occupational pension scheme (as defined in section 2.
Companies Act 2. 00. Companies Act 2. 00.
The Model Articles permit the company to purchase and maintain insurance at the cost of the company for the benefit of the directors. This summary of the Model Articles has been provided for general information only.
It does not purport to be complete and does not include many relevant provisions that should be considered from the Companies Act 2. This summary should not be relied upon and advice should always be taken if you are in any doubt as to the relevant rules. Please contact one of our company secretarial experts if you would like any specific advice.