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Procedure Model Articles Notes

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Procedure for Model Articles Part of the corporate lawyer's role is to identify the necessary decisions which a client's proposal entails and to advise the client on the best way of achieving these. In turn the lawyer will likely draft all the documentation necessary to support the method chosen.

Board Meeting 1 Call?Notice?MA9: Any one director may call a BM or authorise a secretary to do so
? Apply to the facts: who has called it?
MA9(1) and (3): must be given to all the Ds before the meeting, irrespective of whether he is out of the UK or not An individual D may waive their right to be notified (MA9(4)) Re Homer: it must be reasonable notice MA9(3) and Re Trinidad: Notice may be oral MA9(2): the notice must give date, time, place, method of communication

? Apply to the facts: has there been reasonable notice? If so, why??QuorumOnly directors, alternatives and secretaries may attend Only directors and alternatives form part of quorum Minimum number is 2 (MA11(2)); Ds cannot exercise discretion and reduce it to 1 Can still attend even if can't vote (Hayes v Bristol Plant Hire)

? Apply to the facts: who has to turn up? If not, only proposal can be to call

Under s.177/s.182 a D must make a

Declarati on of Interests (See Director's Duties Chart for more D's Duties)

another BM. If In a Proposed Transaction (s.177)a D of the Co. has a direct or indirect (e.g. a spouse) interest, then the nature and extent of his interest must be made to the other directors (s.177(1)) via: a) at the BM (s.177(2)(a)) as an Oral to the other Directors T&F NOTE; b) notice in writing to the other Ds (s.177(2)(b)(i)) if in Writing it must comply with CA s184, namely it must be in paper or electronic form (if authorised by Ds) and be sent by hand, post or, electronically; c) General Notice in writing (s.177(2)(b)(ii)) (generally when a D's interest arises repeatedly over time and in order for the D not to make a declaration every time) namely when: i. Under CA s 185(2)(a) a D of a Co. is also a D or a S'holder in another Co and both companies are trading. ii. Under CA s 185(2)(b) D made a general notice regarding his connection with a specified person e.g. his wife/brother. d) Before the transaction is entered into (s.177(4)) e) If becomes inaccurate, a further declaration is needed (s.177(2)) f) T&F NOTE notice to a Co.'s secretary does not amount to valid notice, valid notice is to Ds.?There are some exceptions: o D is not aware of either the interest or transaction (s.177(5)) o If interest cannot reasonably be regarded as likely to give rise to a conflict of interest (s.117(6)(a)) o T&F NOTE If other Ds are already aware (s.117(6)(b)) o If it concerns the terms of his service contract (s.117(6)(c)) o A sole D need not make a declaration However, regardless of the above exceptions, it is always good practice to declare any interest The effects of making the declaration are that: o The D can't vote or count in the quorum (MA14(1)) o Unless:
? MA14(4) exceptions apply (guarantee given by D; subscription 1


of shares; benefits to employees); or MA14(3), by OR of members, temporarily disapplies MA14(1)

If in an Existing Transaction (s.182)Direct or indirect (e.g. a spouse) interest (s.182(1))The same exceptions as aboveThe nature and extent of his interest must be made: o As soon as reasonably practicable (s.182(4)) o At a BM (s.182(2)) or by notice as per s.184 (in writing) or s.185 (general notice) o Further declaration made if it becomes inaccurate (s.182(2))The effects of making the declaration are the same as aboveA D who fails to declare under s.183 commits a criminal offence

? Apply to the facts: what is the interest? Has the declaration been made??Voting

Only Ds 'present' may vote (MA7) By simple majority show of hands (or unanimous as per MA8) If there's deadlock: o the negative view prevails (MA7(1)) o if there's a chair, they can use casting vote (MA13(1)) unless excluded from quorum

? Apply to the facts: how are the resolutions going to be validly passed?Resolution s

Explain who on the board are likely to vote in favour After due and careful consideration, the Board resolves to:

1. Call a GM or circulate a WR (s.302)

2. [adopt new articles SR (s.21)]

3. [appoint a new director, effected when resolution says - MA17]

4. [approve and circulate the proposed buy-back contract]

5. [approve the draft terms of the loan to D [subject to GM] - MA3/s.197]

6. [call a GM for S'holders to pass OR for the proposed loan to D MA3/s.197]

7. [approve the terms of the service contract [subject to GM] - MA3]

8. [approve the wording of the signage and order it - MA3]

9. [approve to change the name SR (s.77)]

10.[authorise 2 Ds to sign - ss.43/44]

11. [change accounting reference date - s.392/MA3]

12.[change the address of the registered office - s.87/MA3]

13.[change the stationary - MA3]

? Apply to the facts: have these been passed? See MA14 on ability to vote. What combination of Ds are needed to pass?

General Meeting* [see WR below for alternative]


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