The Companies Act 2006 introduced several changes to the way companies are registered and operate in the UK.
The new Act came fully into force on 1st October 2009, under the 2006 Act the role of the Memorandum of Association is greatly reduced for both existing companies and new companies.
Under the 2006 Act the Memorandum of Association of a company has radically changed. The most significant changes probably relate to the Objects Clause and the Authorised Share Capital.
Before 1 October 2009 the Memorandum of Association set out a company's objects (which determined a company's capacity) and its authorised share capital (a ceiling on the number of shares which the company could issue). The new Memorandum of Association instead simply states that the subscriber(s) wish to form a company, that each subscriber agrees to become a shareholder and they each agree to take at least one share. Thus, the new Memorandum does not contain provisions relating to the company's objects or authorised share capital. Under the 2006 Act a company's objects and authorised share capital are unrestricted unless the Articles specifically set out restrictions.
Consequently for companies incorporated before 1 October 2009 under the 1985 Act, the provisions of the Memorandum of Association which do not appear in the new Memorandum of Association are treated as provisions of their Articles of Association. Thus, for a company incorporated under the 1985 Act its Objects Clause and Authorised Share Capital are deemed to be contained within its Articles and if the company wishes to remove these restrictions then it has to pass a Special Resolution to amend its Articles of Association or adopt new Articles altogether.
This Special Resolution – Amend Memorandum of Association shall be used where a company wishes to remove the provisions in the Memorandum of Association which relate to the Objects Clause and the Authorised Share Capital so that it can take advantage of the changes introduce by the Companies Act 2006.
Please note that a copy of the Resolution must be delivered to Companies House within 15 days of it being passed. Also, a copy of the amended Articles must be attached to the Resolution; it is an offence not to do so under section 34 of the Companies Act 2006.