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Hi, there is a question in the mock exam that says: with reference to a company’s constitution, which one of the following statements is false?
a) binding contract between company and members
b)may be altered if the alteration is for the benefit of the whole company
c) may only be altered if 75% of the members agree
d) needs to be delivered to the Registrar when incorporating the companyThe false statement is c) but I thought the Articles of Association were a binding contract between company and members not the constitution. which one would you say is the false statement?
thanks!
But the Articles are the rules under which the company exists and thus it is those Articles (now referred to as the constitution) that create the binding contract
Option c (may only be altered if 75% of the members agree) is almost correct … but should read something like “may only be altered if approved by special resolution of the members”
OK?
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