Articles of Association - when did you last read yours?

Few small or medium size businesses operate to the letter of their Articles of Association (”Articles”).  This is not that surprising given the technical language and complexity of many of these documents.  Even where the directors and shareholders are aware of the terms of the Articles the requirements can seem technical and have little relationship to the day to day business of making money.  Because of this the Articles are more often observed in the breach.  Most of the time companies get away with this relaxed approach but in the event of a shareholders dispute or a dispute between shareholders and directors then the first thing a lawyer is likely to do is get hold of a copy of the Articles and digest the contents.  This can lead to some unpleasant surprises.

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