ACCA LW · Chapter 8 · Question 9 of 11
A company wishes to alter its articles. Which of the following correctly states the law?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) The articles may be altered by special resolution, and the alteration must be made bona fide for the benefit of the company as a whole
Explanation
Under s21 Companies Act 2006 a company may amend its articles by special resolution. Following Allen v Gold Reefs of West Africa and Greenhalgh v Arderne Cinemas, the alteration must be made in good faith for the benefit of the company as a whole, judged by asking whether it benefits a hypothetical member. Unanimity is required only where provisions are entrenched under s22 in a way that requires it.
More Legal personality, company formation and constitution MCQs
- Q11What is the legal effect of the certificate of incorporation issued by the Registrar of Companies?
- Q1What principle was established by Salomon v A Salomon & Co Ltd?
- Q2In Lee v Lee's Air Farming Ltd, Mr Lee was the controlling shareholder and sole director of a company and was also employed by it as a…
- Q3A former managing director, bound by a restrictive covenant not to solicit his former employer's customers, set up a company to solicit…
- Q4Which of the following is an example of the veil of incorporation being lifted by STATUTE rather than by the courts at common law?