Companies Act 1985

Publication Date:January 01, 1985


Companies Act 1985

1985 CHAPTER 6

An Act to consolidate the greater part of the Companies Acts.

[11th March 1985]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

I Formation and Registration of Companies; Juridical Status and Membership

Part I

Formation and Registration of Companies; Juridical Status and Membership

Chapter I

Company Formation

Memorandum of association

Memorandum of association

S-1 Mode of forming incorporated company.

1 Mode of forming incorporated company.

(1) Any two or more persons associated for a lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company with or without limited liability

(2) A company so formed may be either—

(a ) a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them (‘a company limited by shares’)

(b ) a company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up (‘a company limited by guarantee’); or

(c ) a company not having any limit on the liability of its members (‘an unlimited company’)

(3) A ‘public company’ is a company limited by shares or limited by guarantee and having a share capital, being a company—

(a ) the memorandum of which states that it is to be a public company, and

(b ) in relation to which the provisions of this Act or the former Companies Acts as to the registration or re-registration of a company as a public company have been complied with on or after 22nd December 1980

and a ‘private company’ is a company that is not a public company

(4) With effect from 22nd December 1980, a company cannot be formed as, or become, a company limited by guarantee with a share capital.

S-2 Requirements with respect to memorandum.

2 Requirements with respect to memorandum.

(1) The memorandum of every company must state—

(a ) the name of the company;

(b ) whether the registered office of the company is to be situated in England and Wales, or in Scotland;

(c ) the objects of the company.

(2) Alternatively to subsection (1)(b ), the memorandum may contain a statement that the company's registered office is to be situated in Wales; and a company whose registered office is situated in Wales may by special resolution alter its memorandum so as to provide that its registered office is to be so situated.

(3) The memorandum of a company limited by shares or by guarantee must also state that the liability of its members is limited.

(4) The memorandum of a company limited by guarantee must also state that each member undertakes to contribute to the assets of the company if it should be wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.

(5) In the case of a company having a share capital—

(a ) the memorandum must also (unless it is an unlimited company) state the amount of the share capital with which the company proposes to be registered and the division of the share capital into shares of a fixed amount;

(b ) no subscriber of the memorandum may take less than one share; and

(c ) there must be shown in the memorandum against the name of each subscriber the number of shares he takes.

(6) The memorandum must be signed by each subscriber in the presence of at least one witness, who must attest the signature; and that attestation is sufficient in Scotland as well as in England and Wales.

(7) A company may not alter the conditions contained in its memorandum except in the cases, in the mode and to the extent, for which express provision is made by this Act.

S-3 Forms of memorandum.

3 Forms of memorandum.

(1) Subject to the provisions of sections 1 and 2, the form of the memorandum of association of—

(a ) a public company, being a company limited by shares,

(b ) a public company, being a company limited by guarantee and having a share capital,

(c ) a private company limited by shares,

(d ) a private company limited by guarantee and not having a share capital,

(e ) a private company limited by guarantee and having a share capital, and

(f ) an unlimited company having a share capital,

shall be as specified respectively for such companies by regulations made by the Secretary of State, or as near to that form as circumstances admit.

(2) Regulations under this section shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

S-4 Resolution to alter objects.

4 Resolution to alter objects.

A company may by special resolution alter its memorandum with respect to the objects of the company, so far as may be required to enable it—

a ) to carry on its business more economically or more efficiently; or
b ) to attain its main purpose by new or improved means; or
c ) to enlarge or change the local area of its operations; or
d ) to carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company; or
e ) to restrict or abandon any of the objects specified in the memorandum; or
f ) to sell or dispose of the whole or any part of the undertaking of the company; or
g ) to amalgamate with any other company or body of persons;

but if an application is made under the following section, the alteration does not have effect except in so far as it is confirmed by the court.

S-5 Procedure for objecting to alteration.

5 Procedure for objecting to alteration.

(1) Where a company's memorandum has been altered by special resolution under section 4, application may be made to the court for the alteration to be cancelled

(2) Such an application may be made—

(a ) by the holders of not less in the aggregate than 15 per cent. in nominal value of the company's issued share capital or any class of it or, if the company is not limited by shares, not less than 15 per cent. of the company's members; or

(b ) by the holders of not less than 15 per cent. of the company's debentures entitling the holders to object to an alteration of its objects;

but an application shall not be made by any person who has consented to or voted in favour of the alteration.

(3) The application must be made within 21 days after the date on which the resolution altering the company's objects was passed, and may be made on behalf of the persons entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.

(4) The court may on such an application make an order confirming the alteration either wholly or in part and on such terms and conditions as it thinks fit, and may—

(a ) if it thinks fit, adjourn the proceedings in order that an arrangement may be made to its satisfaction for the purchase of the interests of dissentient members, and

(b ) give such directions and make such orders as it thinks expedient for facilitating or carrying into effect any such...

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