Articles of Association in UK Law

Leading Cases
  • Ebrahimi v Westbourne Galleries Ltd; Re Westbourne Galleries Ltd
    • House of Lords
    • 03 May 1972

    The words are a recognition of the fact that a limited company is more than a mere judicial entity, with a personality in law of its own: that there is room in company law for recognition of the fact that behind it, or amongst it, there are individuals, with rights, expectations and obligations inter se which are not necessarily submerged in the company structure.

    The superimposition of equitable considerations requires something more, which typically may include one, or probably more, of the following elements—(i) an association formed or continued on the basis of a personal relationship, involving mutual confidence—this element will often be found where a pre-existing partnership has been converted into a limited company; (ii) an agreement, or understanding, that all, or some (for there may be "sleeping" members), of the shareholders shall participate in the conduct of the business; (iii) restriction upon the transfer of the members' interest in the company—so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere.

    The just and equitable provision nevertheless comes to his assistance if he can point to, and prove, some special underlying obligation of his fellow member(s) in good faith, or confidence, that so long as the business continues he shall be entitled to management participation, an obligation so basic that if broken, the conclusion must be that the association must be dissolved.

  • Fisher v Cadman and Others
    • Chancery Division
    • 14 June 2005

    As to the first of the possibilities referred to in paragraph 88 above (breach of the Articles of Association), it is my view that, in considering whether the conduct of the controllers amounts to conduct unfairly prejudicial to the interests of a member, it is also relevant to take into account any agreement, understanding or clearly established pattern of acquiescence on the part of that member which may have led the controllers to act or continue to act in a particular way, even if their action may have involved a departure from a strict adherence to the terms of the Articles.

  • Holmes v Lord Keyes
    • Court of Appeal
    • 25 March 1958

    I think that the Articles of Association of the Company should be regarded as a business document and should be construed so as to give them reasonable business efficacy, where a construction tending to that result is admissible on the language of the articles, in preference to a result which would or might prove unworkable. Unless the appointment begins when the result of the poll is ascertained and on no earlier date, it would be impossible for the Company to know who its Directors were.

  • O'Neill v Phillips
    • House of Lords
    • 20 May 1999

    First, a company is an association of persons for an economic purpose, usually entered into with legal advice and some degree of formality. The terms of the association are contained in the articles of association and sometimes in collateral agreements between the shareholders. One of the traditional roles of equity, as a separate jurisdiction, was to restrain the exercise of strict legal rights in certain relationships in which it considered that this would be contrary to good faith.

    But the second leads to the conclusion that there will be cases in which equitable considerations make it unfair for those conducting the affairs of the company to rely upon their strict legal powers. Thus unfairness may consist in a breach of the rules or in using the rules in a manner which equity would regard as contrary to good faith.

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Legislation
  • Companies Act 1862
    • UK Non-devolved
    • January 01, 1862
    ... ... 4. No Company, Association, or Partnership consisting of more than Ten Persons shall be formed, after ... Articles of Association ... Articles of Association ... Regulations to be ... ...
  • The Transfer of Functions (Elections, Referendums, Third Sector and Information) Order 2016
    • UK Non-devolved
    • January 01, 2016
    ... ... , approvals, contracts and other agreements, memoranda and articles of association, certificates, deeds and other documents;“the Leader of ... ...
  • Companies Act 1900
    • UK Non-devolved
    • January 01, 1900
    ... ... respect of any association shall conclusive evidence that all the ... requisitions of the Companies ... the articles of association as a director or secretary of the company ... of compliance ... ...
  • Companies Act 1867
    • UK Non-devolved
    • January 01, 1867
    ... ... Managing Director, may, if so provided by the Memorandum of Association, be unlimited. S-5 ... Liability of Director, past and present, where ... the Option of the said Board, be inserted in the Memorandum and Articles of Association, or in both or One of such Documents. Calls upon Shares ... ...
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