Until now, the general approach has been that a company cannot claim privilege against its own...
Any limited company incorporated in England & Wales must adopt and maintain Articles of Association which specify the rules and regulations governing that company. A company’s Articles of Association form its fundamental constitution.
Articles of Association regulate the internal affairs and policies of a company and form a legal contract between each of the company’s members and between each of the member’s and the company itself.
A company’s Articles of Association will contain specific provisions relating to the governance of the company and the powers and responsibilities of its members.
You should consider the following matters when preparing Articles of Association:
- Shareholders’ rights and responsibilities
- Directors’ rights and responsibilities
- Share Capital and Distributions
- Decision-making by both Shareholders and Directors
- Administrative arrangements
A company’s Articles of Association must always be correctly registered with the Registrar of Companies and will appear at Companies House, within the public domain. For this reason, it can be common to include more sensitive commercial type provisions in a Shareholders Agreement – a private agreement between a company and its members.
Once adopted, the Articles of Association of a company can and should be amended, to keep up with ongoing changes in the law and to reflect any changes in the company’s business and personnel. Any amendments should be made in accordance with the Companies Act 2006 and any specific rules contained in the company’s current Articles of Association. A copy of any amended or newly adopted Articles of Association must be filed with the Registrar of Companies within 15 days of adoption and a failure to comply with these filing rules can result in both criminal and civil penalties.
If you or your business require information regarding anything covered in this blog or generally in relation to any other corporate matter, please call Jade Langford, a Solicitor in our Corporate Team, on 01384 340 504 or e-mail Jade at jlangford@georgegreen.co.uk for advice and assistance.