ICAEW BL · Chapter 8 · Question 9 of 10
Kestrel Bakeries Ltd was incorporated under the Companies Act 2006 and adopted the model articles without amendment. Its board now wants the company to start a software consultancy business. Is the company legally free to do so?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Yes, because a company's objects are unrestricted unless its articles specifically restrict them
Explanation
Under s31 Companies Act 2006, a company's objects are unrestricted unless its articles specifically restrict them. The model articles contain no restriction on objects, so Kestrel Bakeries Ltd may move into any lawful business. Under the 2006 Act the memorandum is a simple statement by the subscribers and no longer contains objects. No registrar approval is needed for a change of business.
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