157.1 Invalid amendments

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COMPANIES vol 9(1) commentary, articles

157.1 Invalid amendments

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| Commentary

157 Changing the articles

The problems of the standard articles may be addressed to a certain extent by amending those articles¹. For instance, it is common in some companies, particularly where the company is to be supported by private equity finance, to change the articles in order to create two or more

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(4) FORMATION AGREEMENTS AND SHAREHOLDERS’ AGREEMENTS

157.2 Other limitations on amending the articles

158.1 Russell v Northern Bank

158.2 Impact on the drafting of a shareholders’ agreement

159 Who should be the parties to the agreement?

160 The need for consistency between the articles and the shareholders’ agreement

161 Ensuring consistency between the shareholders’ agreement and any subsidiary agreements

162 Summary of preliminary drafting points

163 Customising a shelf company

164 Initial capital

165 Further finance from the company’s shareholders

166 Further finance from outside the joint venture

167.1 The desirability of a distribution policy

167.2 Default provisions in the shareholders’ agreement

168 The need for restrictions on board and shareholders’ decisions

169.1 Restrictions which should be accepted by the shareholders alone

169.2 General running of the business

169.3 Financial policy

169.4 Transactions involving directors, employees and consultants

169.5 Litigation

170 Ensuring that the shareholders have adequate information to make decisions