ACCA F4 - Corp and Business Law (ENG)

Part D The formation and constitution of business organisations  14: Constitution of a company 213

Part 4 Decision-making by shareholders

Organisation of general meetings

37. Attendance and speaking at general meetings


38. Quorum for general meetings


39. Chairing of general meetings


40. Attendance and speaking by directors and non-shareholders


41. Adjournment
    Voting at general meetings


42. Voting: general


43. Errors and disputes


44. Poll votes


45. Content of proxy notices


46. Delivery of proxy notices


47. Amendments to resolutions
    Part 5 Administrative arrangements


48. Means of communication to be used


49. Company seals


50. No right to inspect accounts and other records


51. Provision for employees on cessation of business
    Directors' indemnity and insurance


52. Indemnity


53. Insurance

2.2.2 Alteration of the articles

The articles may be altered by a special resolution. The basic test is whether the alteration is for the

benefit of the company as a whole.

Any company has a statutory power to alter its articles by special resolution. A private company may

pass a written resolution with a 75% majority. The alteration will be valid and binding on all members of

the company. Copies of the amended articles must be sent to the Registrar, within 15 days of the

amendment, taking effect.

2.2.3 Making the company's constitution unalterable

There are devices by which some provisions of the company's constitution can be made unalterable

unless the member who wishes to prevent any alteration consents.

(a) The articles may give a member additional votes so that they can block a resolution to alter articles

on particular points (including the removal of their weighted voting rights from the articles).

However, to be effective, the articles must also limit the powers of members to alter the articles

that give extra votes.

(b) The articles may provide that when a meeting is held to vote on a proposed alteration of the articles

the quorum present must include the member concerned. They can then deny the meeting a

quorum by absenting themselves.

(c) The Act permits companies to 'entrench' provisions in their articles. This means specific

provisions may only be amended or removed if certain conditions are met which are more

restrictive than a special resolution such as agreement of all the members. However, such

'entrenched provisions' cannot be drafted so that the articles can never be amended or removed.

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