Breaching the articles of association
Breaching the articles of association

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • Breaching the articles of association
  • What is the company’s constitution
  • The articles of association
  • A contract between company and members?
  • A contract as between members?
  • Nature of the contract
  • Breaching the articles
  • Ratification
  • Individual membership rights
  • Shareholders’ agreements
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Corporate lawyers?

This Practice Note considers the unique contractual status of the articles of association between the company and its members, primarily under s 33(1) of the Companies Act 2006 (CA 2006). Various breaches of the articles are considered, with reference to the ability of the majority of members to ratify a breach in certain circumstances, or otherwise take appropriate action against the board or an individual director. Claims brought by a minority shareholder are discussed, particularly personal actions for alleged breaches of ‘membership rights’ arising under the constitutional contract. Reference is also briefly made to derivative actions, unfair prejudice claims and winding-up.

What is the company’s constitution

Unless the context otherwise requires, a company’s constitution is defined under the CA 2006 to include:

  1. the company’s articles of association, and

  2. any resolutions and agreements affecting a company’s constitution

Before 1 October 2009, the memorandum of

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