CIMA BA4 · Chapter 13 · Question 9 of 10
Under English law, the members of a private company want to change its articles of association. Which statement is correct?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) The articles can be altered by special resolution, and the alteration must be made bona fide for the benefit of the company as a whole
Explanation
Section 21 of the Companies Act 2006 allows a company to amend its articles by special resolution, subject to any entrenched provisions. The courts have held that the alteration must be made bona fide for the benefit of the company as a whole (Allen v Gold Reefs of West Africa). Unanimity is only needed if an entrenchment provision requires it.
More Company administration and finance MCQs
- Q1Under English law, what is the principle established in Salomon v Salomon & Co Ltd?
- Q2Under English law, which type of resolution requires a majority of not less than 75% of the votes cast?
- Q3Under English law, which of the following is a key difference between a public company (plc) and a private company?
- Q4Under English law, a promoter signs a contract on behalf of a company before the company is incorporated. Who is liable on the contract?
- Q5Under English law, how can the members of a company remove a director before the end of his term of office?