Drafting of Company Law Documents
Drafting of Company Law Documents tests the Companies Act 2013 framework: charter documents, board and shareholder resolutions, statutory notices, minutes, share certificates, charge documents and reports. The examiner expects correct section references, prescribed forms and filing timelines.
Charter documents
- Memorandum of Association: name, registered office, objects, liability, capital and subscription clauses. The objects clause must not be so wide that it defeats the specific business purpose.
- Articles of Association: internal regulations; may contain entrenchment under Section 5(3), but cannot contradict the memorandum.
- Alteration: the board recommends, members pass the requisite resolution, and the altered document is adopted. MGT-14 is filed within 30 days for special resolutions and specified board resolutions.
Resolutions and forms
Board resolutions under Section 179 cover matters such as opening bank accounts and allotment of shares. Members’ resolutions are ordinary or special. Notice under Section 101 must be accompanied by an explanatory statement under Section 102 for special business. Share certificates are issued in Form SH-1 under Section 46. A charge is registered in Form CHG-1 within 30 days under Section 77.
Worked example
A private company wishes to alter its articles to adopt a new share transfer procedure. The board approves the draft, fixes the EGM date and authorises notice. The notice is sent 21 clear days before the meeting with an explanatory statement disclosing the proposed amendment and its effect. The members pass a special resolution, the articles are amended, and MGT-14 is filed within 30 days. The reasoning is that alteration of articles requires a special resolution under Section 14, and the explanatory statement must enable members to make an informed decision.
Traps
Sending notice without the explanatory statement; filing the wrong form; treating a board resolution as sufficient where a special resolution is required; failing to update the register of members after allotment; and using a resolution by circulation for business that must be transacted at a meeting.