'TABLE A' BASED ARTICLES OF ASSOCIATION WITH 'COMMON ENHANCEMENTS'
| Articles of association (or simply 'articles') is the name given to the rules governing the internal regulation of a company.
'Table A' is a standard form of 'articles of association'. (It is called 'Table A' as it is entitled that way in a schedule to the relevant Companies Act regulations.) A copy of Table A may be viewed by clicking on 'Contents of Table A' in the 'Resources' section of this website. A company may have the whole or any part of Table A as its articles of association. In the case of companies limited by shares, such as UKcorporator's standard configuration companies, if articles are not drawn up and lodged at Companies House, then Table A (as in force at the date of the company's registration) constitutes the company's articles - section 8(2) of the Companies Act 1985.
However, if articles are drawn up and lodged at Companies House, in so far as they do not exclude or modify Table A, then Table A (as in force at the date of the company's registration) constitutes the company's articles - section 8(2) of the Companies Act 1985. If you decide to use one of UKcorporator's standard company configurations, then articles of association will be drawn up for lodgment at Companies House - these articles will adopt the provisions of Table A in a modified form.
It is common for companies to adopt the provisions of Table A in a modified form as experience has shown that Table A is rarely ideal in its unmodified form. The following is a brief review of the main enhancements to Table A which you will find in the articles of association produced by UKcorporator in the case of a private company limited by shares. (The comments below apply, for example, to UKcorporator's two standard company configurations, which both result in the formation of private companies limited by shares.)
Power to allot shares
A common provision is included giving the directors the maximum permissible power to allot new shares.
Liens
The right of the company to claim a lien on any of its issued shares in respect of moneys owing to it is extended in certain respects.
Transfer of shares
You will be given a choice whether or not to have 'pre-emption provisions' in your articles (i.e. provisions which, in essence, allow members of the company to dispose of their shares so long as they first offer them for sale to existing members).
If you choose to have pre-emption provisions in your articles, these will be included along with common provisions allowing 'permitted transfers' (e.g. a transfer to a relative or to effect the appointment of a new trustee) which may occur without regard for the pre-emption provisions.
If you choose not to have pre-emption provisions in your articles, the directors will be given total discretion as to whether to approve any share transfers.
Notice of general meetings
The requirement in Table A to give 21 days' notice of a meeting at which it is proposed to appoint a director has been removed.
Proceedings at general meetings
The pre-conditions stipulated in Table A as being necessary before a poll can be demanded have been relaxed. In essence, a poll may be demanded by any member having the right to vote at the meeting.
Voting of members
A drafting ambiguity inherent in Table A is rectified. It is made clear that voting rights on a poll are only given to members present, either personally or by proxy, at the relevant meeting.
Number of directors
Table A is updated to acknowledge expressly the possibility of a one director company.
Appointment and retirement of directors
The requirement in Table A for directors to retire by rotation is removed.
Disqualification and removal of directors
The provisions in Table A dealing with removal of a director in case of mental disorder have been made less onerous with a view to avoiding the need, in some cases, for a court application.
Proceedings of directors
The quorum requirements have been altered to expressly acknowledge one director companies. The chairman's casting vote in the case of an equality of votes is removed. Provision is made for meetings via such means as telephone, video link and internet chat rooms. The restrictions in Table A preventing directors from voting in certain circumstances where they have a personal interest in the subject matter are somewhat relaxed. (Directors nevertheless remain obliged to declare such interests.)
Minutes
The somewhat onerous list in Table A of situations where minutes are required to be kept is reduced to better reflect commercial reality.
The seal
It is made clear that the company need not have a common seal. (Indeed many people involved in the management of companies regard it as a nuisance to have one.)
Notices
Provision is made to the effect that any notice required by Table A to be given in writing shall be taken to have been properly given if sent by facsimile transmission.
Indemnity
The scope of the company's indemnity in favour of directors and officers is slightly broadened and mention is made of the directors' entitlement to have the company pay for directors' and officers' insurance. |
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