1. CS38010 Company Constitution Company Constitution

2. So far……….  Organisations  Commercial Organisations –Sole Trader –Partnership –Limited Company  Incorporation –Independent Body

3. Company Constitution  Share Capital  Company Constitution  Directors responsibilities

4. Share capital  Shareholders (Subscribers) own Company  At start of Company –Authorised share capital  Number & Nominal (par) Value  Say 100 shares @ £1  Shareholders risk is share value –Partly Paid –Preference Shares

5. Shares  On being Wound Up –All debts must be paid before shareholders –All assets sold –If remainder then divided equally between shareholders –If debts > assets Shareholder lose shares

6. Bureaucracy  Large Companies (PLCs) –Regulated by Companies Act and Stock Exchange  Small & Medium Companies –Regulated by Companies Act Small Company Medium Sized Company Turnover<=£2,000,000<=£8,000,000 Balance Sheet <=£975,000<=£3,000,000 Average Employees <=50<=250

7. Company Constitution  Memorandum of Association –Controls External Relations  Articles of Association –Control Internal Relations  (Shareholders Agreement)

8. Memorandum of Association  Company Name –Restrictions  Country of Registration –England & Wales, Wales, Scotland  Objects of Company –Companies Act 1989 allow general commercial company  A Liability Clause –Liability of members is limited  Authorised Share value –Nominal Share Value and Number

9. Articles of Association  Rules of Share capital  Transfer of Shares  Meetings of Members  Rules Governing Directors’ Appointments  Power of Directors  Dividends and Reserves

10. Shareholders Agreements  Protect interests of minor shareholders  Article of Association –Changed at General Meeting –Needs 75% majority  Agreement Between Shareholders –All must sign –Can govern way voting is done

11. Directors & Company Secretary  Directors Elected by Shareholders –Act In best Interest of Company –Honest –Declare Interests –Aware of Company’s Trading Position –Exexutive & Non-Executive Directors  Company Secretary –Statutory Returns to Companies House –Could be Director