C/L/30. COMPANY LAW

The purpose of this paper is to examine the different rules applicable in a private company. In this essay, I have examined the rules relating to the constitutional documents of a company, that is, the articles of association and the memorandum of association. I have in particular looked at the breaches of a company's articles of association by the board of directors and also the limits placed by the memorandum of association on the board's authority to bind the company. In relation to this, it has been necessary to consider the demise of the ultra-vires rule and the new reforms, which favour third parties dealing with companies that have exceeded their powers under the memorandum. This paper also deals with shareholder remedies, in particular the statutory remedy available under section 459 of the Companies Act 1985 to a minority shareholder whose interests have been prejudiced by the actions of the majority shareholders. Finally this paper touches upon the issue of reduction of a company's share capital.