Articles of Association: time for more changes?
A number of provisions of the Companies Act 2006 (the Act) are now in force. The remainder of the Act will, with some minor exceptions, be implemented on 1 October this year.
We now consider how changes to be introduced this October, a number of them deregulatory in nature, will affect a company’s constitution and the up-dates which companies may wish to make to their articles as a result.
A fundamental change to be made by the Act relates to the contents of a company’s constitutional documents. As from 1 October, the majority of the provisions of an existing company’s memorandum of association (memorandum), including the objects clause and any entrenched provisions, will be deemed to be part of the articles.
This reflects the fact that, for companies incorporated on or after 1 October, the memorandum will become a much more simplified document than at present. It will merely record the intention of each subscriber to form a company and to take at least one share in that company.
There is no need for an existing company to make any filings at Companies House, or to take any other steps, to reflect the deemed transfer of the relevant provisions from the memorandum to the articles. This will take effect by operation of law.
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