Any Company Law Experts Here ?

[Baron Pepperpot]

Hello everyone,

I help run a small community group that is a company limted by guarantee with 1 member and 3 directors (including said member)

When we were incorporated, so as to get up and running, we simply adopted the Model Articles of Association.

We do need to change this though as we want to apply for funding to sustain our immediate future and grant making bodies require a more bespoke set of articles.

My idea for now would be to create a new set of articles which is basically adding clear aims and objectives to the present set and showing us to have a more restrictive mandate, and reflecting our intentions as a community group.

One application deadline is not too far away and we need to get this done quickly.

What is the process for us filing a new set of Articles ?

 

[Adders1]

Hello everyone,

I help run a small community group that is a company limted by guarantee with 1 member and 3 directors (including said member)

When we were incorporated, so as to get up and running, we simply adopted the Model Articles of Association.

We do need to change this though as we want to apply for funding to sustain our immediate future and grant making bodies require a more bespoke set of articles.

My idea for now would be to create a new set of articles which is basically adding clear aims and objectives to the present set and showing us to have a more restrictive mandate, and reflecting our intentions as a community group.

One application deadline is not too far away and we need to get this done quickly.

What is the process for us filing a new set of Articles ?

Need to file a special resolution, shouldn't be a problem, the limited by guarantee status doesn't affect your status as a small company, so this should help: http://www.bis.gov.uk/files/file42261.pdf (page 5 onwards)

 

[Adders1]

Need to file a special resolution, shouldn't be a problem, the limited by guarantee status doesn't affect your status as a small company, so this should help: http://www.bis.gov.uk/files/file42261.pdf (page 5 onwards)

EDIT: But I am no way an expert, been a number of years since I studied law, and I've been drinking.

 

[Lord Bracknell]

It sounds like you need to be looking at some of the model articles of association that have been specifically developed for community based organisations, rather than 'regular' companies - for example, if you are a not-for-profit group, this needs to be explicitly stated, and you need to ensure that there is appropriate provision for disposing of the assets properly, should the organisation decide to wind itself up; and if you have charitable objectives, these need to be defined clearly (even if you decide not to register formally as a charity).

This might be a place to start looking:-

http://www.navca.org.uk

They have published a series of on-line podcasts which may help:-

We have developed a model Memorandum and Articles of Association (mem and arts) for local support and development organisations which is fully compliant with the Charities Act 2011 and the Companies Act 2006, and approved as a charitable model by the Charity Commission.

The Charities Act 2011 was a consolidation Act, which brought together various Acts, including Charities Act 1993 and Charities Act 2006. This did not alter the law, just brought exisitng legislation together in one law. We have updated the models to refer to the new section and clause references. The podcasts and other supporting information refer to the previous acts in places. The correct reference would now be to the Charities Act 2011. All other information is however correct.

We strongly recommend that local support and development organisations are incorporated as a company, as well as having charitable status. Unlike unincorporated organisations, a company has a separate legal existence from its members. This means that the company can employ staff, own property, enter into contracts, and sue or be sued in the courts, rather than individual management committee members being personally responsible for these functions.

 

[Baron Pepperpot]

It sounds like you need to be looking at some of the model articles of association that have been specifically developed for community based organisations, rather than 'regular' companies - for example, if you are a not-for-profit group, this needs to be explicitly stated, and you need to ensure that there is appropriate provision for disposing of the assets properly, should the organisation decide to wind itself up; and if you have charitable objectives, these need to be defined clearly (even if you decide not to register formally as a charity).

This might be a place to start looking:-

http://www.navca.org.uk

They have published a series of on-line podcasts which may help:-

We have developed a model Memorandum and Articles of Association (mem and arts) for local support and development organisations which is fully compliant with the Charities Act 2011 and the Companies Act 2006, and approved as a charitable model by the Charity Commission.

The Charities Act 2011 was a consolidation Act, which brought together various Acts, including Charities Act 1993 and Charities Act 2006. This did not alter the law, just brought exisitng legislation together in one law. We have updated the models to refer to the new section and clause references. The podcasts and other supporting information refer to the previous acts in places. The correct reference would now be to the Charities Act 2011. All other information is however correct.

We strongly recommend that local support and development organisations are incorporated as a company, as well as having charitable status. Unlike unincorporated organisations, a company has a separate legal existence from its members. This means that the company can employ staff, own property, enter into contracts, and sue or be sued in the courts, rather than individual management committee members being personally responsible for these functions.

I have downloaded model articles for a community interest comapny which I can adapt. Later on we can work on issues such as membership and AGM's etc. I think the most important issue at the moment is to show a more narrow and defined set of objectives.

Do you know what the documentary process for passing a special resolution is ? I suppose if we have only one member-and they pass it-then voting isn't needed !

 

[Lord Bracknell]

I have downloaded model articles for a community interest comapny which I can adapt. Later on we can work on issues such as membership and AGM's etc. I think the most important issue at the moment is to show a more narrow and defined set of objectives.

Do you know what the documentary process for passing a special resolution is ? I suppose if we have only one member-and they pass it-then voting isn't needed !

I know what the process is in the organisation where I am Company Secretary (an Industrial and Provident Society, rather than a CIC). It's set out in the Company's Rules (which are the equivalent of Articles of Association in other forms of company). All we have to do is convene a general meeting of members (in accordance with our rules, of course), pass a resolution that changes the rules, and then notify the FSA (or whatever it's now called) in a form that satisfies them. What do your existing Articles of Association say?

 

[Lord Bracknell]

Be wary of adapting Model Articles too much. Companies House prefer to see model articles that have already been through the mill of being properly scrutinised. Make too many changes and it might be a long time before they are accepted.

 

[Lord Bracknell]

https://www.gov.uk/set-up-a-social-enterprise

You might also consider the option of becoming a CIO (Charitable Incorporated Organisation).

http://www.bis.gov.uk/assets/biscor...0-guide-legal-forms-for-social-enterprise.pdf

 

[Baron Pepperpot]

I know what the process is in the organisation where I am Company Secretary (an Industrial and Provident Society, rather than a CIC). It's set out in the Company's Rules (which are the equivalent of Articles of Association in other forms of company). All we have to do is convene a general meeting of members (in accordance with our rules, of course), pass a resolution that changes the rules, and then notify the FSA (or whatever it's now called) in a form that satisfies them. What do your existing Articles of Association say?

It's a bit wierd because we only have one member (as per memorandum) , who is a director (1 of 3) So the other 2 directors would have to call a general meeting with her !

 

[Lord Bracknell]

If, as you say, it's a "community group", how can other members of the community join it?

 

[Baron Pepperpot]

If, as you say, it's a "community group", how can other members of the community join it?

Ha, yes. It's all a bit strange. Basically we've been running for two years, and we have no solid management structure to speak of. We just get on with it. We've never been much interested in corporate stuff except that I file a balance sheet each year with Companies House after getting an accountant to audit it. It's only now that we need to apply for funding that we have to get our act together here.

 

[tinycowboy]

Have you been through the Mem & Arts? Usually, there will be a section on voting power, board decision-making, etc which sets out how various decisions can be made. Changing the Articles should be one of them. If it's not, you would need to get lawyer's advice on this, although you should get some legal advice on this anyway.

 

[bristolseagull]

Instruct a solicitor.

Come and see us, Rohan & Co, we're a commercial firm based in Haywards Heath. I'm a litigation lawyer but my boss specialises in company commercial matters. 01444 450901.