______________________________________________ SAMPLE ARTICLES OF ASSOCIATION for a NATIONAL GOVERNING BODY

______________________________________________
SAMPLE ARTICLES OF ASSOCIATION
for a NATIONAL GOVERNING BODY
incorporated as a company limited by guarantee
AND GUIDANCE NOTES FOR THEIR USE
prepared by Farrer & Co LLP
October 2012
______________________________________________
These notes are intended for guidance only. Where you intend to adopt new Articles using this
precedent it is advisable to take specific legal advice to ensure that any such amendments or
changes are properly made and appropriate to your circumstances.
amendments or changes are properly
relevant/appropriate to your circumstances.
These guidance notes and the attached Sample Articles only apply to
NGBs constituted as companies limited by guarantee. They are not
suitable for use by NGBs constituted as companies limited by shares,
unincorporated members clubs or Industrial & Provident Societies.
made
and
5.
When you have completed the amendments, you should check
that the clause numbering is sequential and check that the crossreferencing is correct.
The Sample Articles are intended to provide a starting point for
NGBs wishing to amend their own Articles to achieve
Companies Act 2006 compliance. The existing NGB's Articles
will need to be read alongside the Sample Articles so that those
areas which differ from NGB to NGB, i.e. the identity of the
NGB's members (in some cases these will be individuals, in
others clubs and others national associations and in some a
combination of all three) and how the Board is made up can be
included. These Articles will therefore need amendment to
reflect those of your NGB's current provisions – they cannot just
be adopted without further thought.
6.
If you have queries when using the Articles please contact Joy
Tottman at The Sport and Recreation Alliance on 020 7976 3926
or by email (jtottman@sportandrecreation.org.uk).
2.
The Sample Articles reflect the changes introduced under the
Companies Act 2006 (2006 Act) and are based on the Model
Articles (which are the default Articles for new companies
incorporated under the Companies Act).
8.
3.
The Guidance Notes are set out alongside the relevant Article
and provide an explanation of the principal provisions which
appear in the Sample Articles. They are intended to be read in
conjunction with the Sample Articles themselves. Where a
provision is optional this has been indicated.
INTRODUCTION
1.
4.
Adopting the New Articles
7.
You will need to pass a special resolution of the company to
adopt new Articles. The form of wording for such a resolution is
set out at Annex 2.
VAT Exemption
These notes are intended for guidance only and are not a
substitute for taking advice on your own circumstances. Where
you intend to amend your Articles or adopt new Articles it is
advisable to take legal advice to ensure that any such
Some NGBs are exempted from having to charge VAT in
relation to certain sports supplies (typically where it has
individual members in respect of their members' subscriptions).
In order for the NGB to benefit from the VAT exemption, the
company must qualify as an eligible body. An eligible body
must:
(a)
be non-profit-making;
(b)
include a restriction on the distribution of profits; and
(c)
not be subject to commercial influence.
To ensure that an NGB is not subject to commercial influence,
the NGB must not purchase certain goods or services (e.g. sports
land, or management/administration services relating to NGB
-1-
\FARDM1\2579252.3
facilities or goods/services) for more than the normal market
price from an officer, shadow officer or connected person.
If the NGB intends to employ or pay its officers and wishes to
benefit from the VAT exemption, then Article 22.4 (which
prohibits the directors' remuneration being determined by or
conditional upon the profits or losses or gross income derived
from the NGB's activities) must be retained in the NGB's
Articles. Excluding the right to remunerate directors does not
prevent the payment of honoraria to officers but to take the
above benefits, the amount of the honoraria again must not be
calculated by reference to gross profits or gross income of the
NGB.
It is important to note that claiming the exemption in relation to
members' subscriptions does NOT exempt the NGB from
charging VAT altogether. Sales will be subject to VAT unless
the NGB's income from taxable supplies is less than the VAT
threshold applying to all businesses.
Farrer & Co LLP (TOB)
October 2012
-2-
\FARDM1\2579252.3
_________________________________________
MEMORANDUM OF ASSOCIATION GUIDANCE NOTES
MEMORANDUM OF ASSOCIATION
Memorandum of Association
- of As of 1 October 2009, by virtue of Section 28 of the Companies Act 2006
the provisions of a company's existing Memorandum of Association have
been deemed to be incorporated within its Articles even if no specific
resolution to so incorporate them has been passed by the company.
[Insert name of NGB]
__________________________________________
The Sample Articles therefore include the provisions which previously
would have been in your Memorandum (i.e. Name, Objects, Place of
Registered Office, Limitation of Liability etc). Unless you want to change
these provisions, you must check that the wording of them is carried over
from your existing Memorandum.
Each subscriber to this memorandum of association wishes to form a
company under the Companies Act 2006 and agrees to become a member
of the company.
Name of each subscriber
1.
[Insert name of Subscriber]
2.
[Insert name of Subscriber]
3.
[Insert name of Subscriber]
4.
[Insert name of Subscriber]
Dated this
day of
A sample form of Memorandum of Association that can be used on
incorporation of a company limited by guarantee after 1 October 2009 is
set out opposite.
Authentication by each
subscriber
20[●].
-3-
\FARDM1\2579252.3
INDEX TO THE ARTICLES
PART 1 INTERPRETATION, OBJECTS AND LIMITATION OF LIABILITY ............. 1
1.
Defined Terms .............................................................................................. 1
2.
Name and Registered Office ......................................................................... 5
3.
Objects .......................................................................................................... 6
4.
Powers........................................................................................................... 7
5.
Liability of Members .................................................................................... 8
PART 2 DIRECTORS AND OTHER OFFICE HOLDERS............................................... 9
DIRECTORS' POWERS AND RESPONSIBILITIES ....................................................... 9
6.
Directors' General Authority ......................................................................... 9
7.
Directors May Delegate ................................................................................ 9
8.
Committees ................................................................................................. 10
DECISION-MAKING BY DIRECTORS ......................................................................... 11
9.
Directors to Take Decisions Collectively .................................................... 11
10.
Unanimous Decisions ................................................................................. 11
11.
Calling a Meeting of the Board ................................................................... 11
12.
Participation in Meetings of the Board........................................................ 12
13.
Composition of the Board and Quorum ...................................................... 13
14.
Chairing of Meetings of the Board .............................................................. 14
15.
Casting Vote ............................................................................................... 14
16.
Conflicts of Interest..................................................................................... 14
17.
Records of Decisions to be Kept ................................................................. 17
18.
Directors' Discretion to Make Further Rules ............................................... 17
APPOINTMENT OF DIRECTORS ................................................................................. 18
19.
Methods of Appointing Directors ............................................................... 18
20.
Elected Directors ......................................................................................... 20
21.
Termination of Director's Appointment ...................................................... 21
22.
[Directors' Remuneration ............................................................................ 22
23.
[Office Holder, e.g. Chair] .......................................................................... 24
24.
[Chief Executive ......................................................................................... 26
25.
[Company Secretary] .................................................................................. 26
26.
Elections...................................................................................................... 27
27.
Casual Vacancies ........................................................................................ 28
PART 3 MEMBERS BECOMING AND CEASING TO BE A MEMBER ..................... 28
28.
Applications for Membership...................................................................... 28
29.
Conditions of Membership .......................................................................... 29
30.
Termination of Membership ....................................................................... 29
ORGANISATION OF GENERAL MEETINGS .............................................................. 31
31.
Notice of and Calling General Meetings ..................................................... 31
32.
Annual General Meetings ........................................................................... 32
33.
Attendance and Speaking at General Meetings ........................................... 33
34.
Quorum for General Meetings .................................................................... 34
35.
Chairing General Meetings ......................................................................... 34
36.
Attendance and Speaking by Directors and Non-Members ......................... 35
37.
Adjournment ............................................................................................... 35
VOTING AT GENERAL MEETINGS ............................................................................ 36
38.
Voting: General ........................................................................................... 36
39.
Errors and Disputes ..................................................................................... 37
40.
Poll Votes .................................................................................................... 37
41.
[Postal Ballot ............................................................................................... 38
42.
Content of Proxy Notices ............................................................................ 39
43.
Delivery of Proxy Notices ........................................................................... 40
44.
Amendments to Resolutions........................................................................ 40
45.
Written Resolution ...................................................................................... 41
PART 4 ADMINISTRATIVE ARRANGEMENTS ......................................................... 42
46.
Means of Communication to be Used ......................................................... 42
47.
No right to Inspect Accounts and Other Records ........................................ 43
DIRECTORS' INDEMNITY AND INSURANCE ........................................................... 44
48.
Indemnity .................................................................................................... 44
49.
Insurance ..................................................................................................... 44
50.
[Rules .......................................................................................................... 45
51.
Dissolution .................................................................................................. 46
\FARDM1\2579252.3
THE COMPANIES ACT 2006
________________________________________
PRIVATE COMPANY LIMITED BY GUARANTEE
_________________________________________
ARTICLES OF ASSOCIATION
- of [Insert name of NGB]
__________________________________________
PART 1
INTERPRETATION, OBJECTS AND LIMITATION OF LIABILITY
ARTICLES OF ASSOCIATION GUIDANCE NOTES
1.
Defined Terms
Article 1 – Definitions
1.1
In these Articles, unless the context requires otherwise:
It is helpful to define the words which are used throughout the Articles
so that it is clear precisely what is meant each time the word is used.
Defined terms should appear with a capitalised first letter whenever the
word is used in the Articles.
2006 Act means the Companies Act 2006 as modified by statute or
re-enacted from time to time.
Articles means these Articles of association, as may be amended
from time to time.
[Appointed Director means a director appointed in accordance with
Article 19.2.7.]
[Appointments Panel means the appointments panel for the
Company established by the Board.]
The list of definitions set out in Article 1 (defined terms) is by no means
exhaustive and the terminology used may well differ from your current
terminology. There may also be other words which need to be included
within your Articles and defined appropriately.
It is very important to ensure that the terminology/definitions used
reflect the terminology you use. There may also be words which you
will not use and you should delete these and any references to them in
the Articles.
[Associate Member means a [sport] club, organisation or individual
(which is not [a Club][a Voting Member]) admitted from time to time
to membership of the Company in accordance with Article 28
1
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(applications for membership) and any applicable Rules.]
bankruptcy includes individual insolvency proceedings in a
jurisdiction other than England and Wales or Northern Ireland which
have an effect similar to that of bankruptcy.
Board means the board of directors of the Company established from
time to time in accordance with Article 23 ([office holder, e.g. chair]),
the members of which are the directors of the Company for the
purposes of the 2006 Act.
[Alternatively you may want to use Executive Board, Management
Board, Executive Committee or Management Committee in which
case references to the Board will need updating.]
Chair means the chair of the Board as appointed by the Board in
accordance with Article 23 ([office holder, e.g. chair]).
chair of the meeting has the meaning given in Article 14.2 (in
respect of a board meeting) or Article 35.2 (in respect of a general
meeting).
[Chief Executive means the person appointed as chief executive in
accordance with Article 24 (chief executive).]
clear days means a period of days exclusive of the day on which the
notice is served and of the day for which it is given.
[Club means those clubs admitted from time to time to membership
of the Company in accordance with Article 28 (applications for
membership) and any applicable Rules and who are entitled to receive
notice of, attend and vote at general meetings.]
Company means the above named company.
[Company Secretary means such person as the Board appoints as
company secretary from time to time.]
Delete if the [Honorary] Secretary will also be the Company Secretary.
[Co-opted Director means a director appointed in accordance with
2
\FARDM1\2579252.3
Article 19.2.9.]
director means a director of the Company, and includes any person
occupying the position of director, by whatever name called.
document includes, unless otherwise specified, any document sent or
supplied in electronic form.
Elected Director means a director elected in accordance with Article
19.2.8.
electronic form has the meaning given in Section 1168 of the 2006
Act.
general meeting means [an annual general meeting or other] [a]
general meeting of the Company.
hard copy form has the meaning given in Section 1168 of the 2006
Act.
[Honorary] Secretary means the person [appointed][elected] from
time to time under Article 23 ([office holder, e.g. chair]) as the
[Honorary] Secretary [and who shall also be the company secretary of
the Company for the purposes of the 2006 Act].
[Include wording in square brackets if the [Honorary] Secretary will
also be the company secretary. Note, there is no longer a legal
requirement for companies limited by guarantee to have a company
secretary. Please see the Guidance Notes to Article 23 for further
details.]
[[Honorary] Treasurer][Finance Director] means the person
[appointed] [elected] from time to time as the [[honorary] treasurer]
[finance director] under Article 23 ([office holder, e.g. chair]).
members means the Voting Members [and Non-Voting Members
together].
[Only include if you have Non-Voting Members.]
[Non-Voting Members means all members of the Company other
than the Voting Members and who shall not be members for the
purposes of the 2006 Act.]
[Only include if you have Non-Voting Members.]
3
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Office means the registered office of the Company.
ordinary resolution has the meaning given in Section 282 of the
2006 Act.
participate in relation to a directors' meeting, has the meaning given
in Article 12 (participation in meetings of the board).
[President means the person [appointed][elected] from time to time
as the president of the Company under Article [●].]
proxy notice has the meaning given in Article 42.1.
[Regulations means the regulations and policies of the Company
made by the Board in accordance with Article 18.2 and amended from
time to time.]
Rules means the rules [policies, regulations, terms of reference and
standing orders] of the Company made by the Board [or by the
Company in general meeting], as amended from time to time.
special resolution has the meaning given in Section 283 of the 2006
Act.
[Sport][Recreation][Activity] means [insert the sport, recreation or
activity promoted by the organisation (e.g. orienteering, football,
chess)].
subsidiary has the meaning given in Section 1159 of the 2006 Act.
Territory means [insert description of geographic area for which
the NGB is responsible].
4
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[Vice-Chair means the person from time to time elected in
accordance with these Articles as the vice-chair of the Company.]
Voting Members the members of the Company who, under these
Articles are entitled to receive notice of, attend and vote at general
meetings and who are members of the Company for the purposes of
the 2006 Act.
writing means the representation or reproduction of words, symbols
or other information in a visible form by any method or combination
of methods, whether sent or supplied in electronic form or otherwise.
Checklist for Definitions:
Make sure that you have definitions for:
●
each Officer/ office holder
●
each category of member
●
any regional committees or Councils
1.2
Unless the context otherwise requires, other words or expressions
contained in these Articles bear the same meaning as in the 2006 Act.
1.3
Words importing the singular number shall include the plural number
and vice versa. Words importing the masculine gender only shall
include the feminine gender. Words importing persons shall include
corporations and unincorporated associations.
1.4
For the purposes of Section 20 of the 2006 Act, the relevant model
Articles shall be deemed to have been excluded fully and replaced
with the provisions of these Articles.
2.
Name and Registered Office
Article 2 – The Name and Registered Office
2.1
The name of the Company is [●].
This Article sets out the name of the NGB and the whereabouts of its
registered office.
2.2
The registered office of the Company is to be in England and Wales.
5
This wording is standard for Articles of Association. Where sports
participants are predominantly female, you may wish to draft to read
"Words importing the feminine gender only shall include the masculine
gender". Where a sport is single sex this should be explicit.
\FARDM1\2579252.3
Objects
Article 3 – Objects
[Either insert here your existing objects as set out in the
Memorandum or amend the following Article to suit your needs.]
We anticipate that you will wish to retain your current objects to
provide certainty as to the role of the NGB.
3.1
[The objects for which the Company is established (Objects) are:
3.1.1
to act as the governing body for the Sport in the Territory;
3.1.2
to act as the representative member for the Territory in international
affairs and to affiliate to and carry out functions delegated to it by the
[insert name of International Federation] and other relevant bodies;
The objects in the Sample Articles are an example only and there may
be other objects which you may want to include. In any event, it is
advisable to include a final "sweep-up" object enabling the NGB to do
anything in pursuance of the objects set out in the preceding subclauses (see Sample Article 3.1.13).
3.
3.1.3
promote, administer and encourage the development of, and
participation in the Sport within the Territory;
3.1.4
to develop and implement a strategy for the development of the Sport
in the Territory including strategies for each of: performance at
international and national level; national competition; and increasing
participation;
3.1.5
to make and vary all such rules for persons participating in the Sport
in the Territory (including rules against doping in the Sport) from
time to time;
3.1.6
to develop a commercial, marketing and public relations programme
for the Sport in the Territory;
3.1.7
to develop a competition programme and co-ordinate competition
fixtures across the Territory;
3.1.8
to select the representative teams to represent the Territory in
international events;
6
It is not necessary for the company to carry out every purpose listed in
the objects all of the time, but where an NGB has objects, it may only
carry out purposes which are authorised by its objects. It is therefore
important that the objects are drafted as widely as needed to allow the
NGB to operate.
The directors of a company have a duty to act within the limits of the
objects clause and bona fide in the best interests of the company. A
director who breaches this duty may become liable to the company.
The members also have a right to prevent the company from
undertaking something outside its objects.
It is possible to amend the objects at any point (by a special resolution)
to add, remove or alter the objects and any such change must be
notified to the Registrar of Companies at Companies House; any
amendment does not take effect until it has been registered.
\FARDM1\2579252.3
3.1.9
to consult and co-operate with other organisations operating in the
Sport within the Territory in all matters relating to the administration,
promotion and playing of the Sport;
3.1.10
to develop and nurture relationships between the Company and [the
sports councils within the Territory,] the British Olympic Association,
the relevant Commonwealth Games Council and relevant government
departments;
3.1.11
to take such action from time to time as the Board may consider
desirable for the benefit of the Sport and the members of the
Company;
3.1.12
to undertake and execute charitable trusts for the benefit of the Sport;
and
3.1.13
to do all such other things as shall be thought fit to further the
interests of the Company or to be incidental or conducive to the
attainment of all or any of the objects stated in this Article 3.]
4.
Powers
Article 4 – Powers and Application of Funds .
4.1
The Company shall have the powers to do all such lawful things as
are consistent with the furtherance of its Objects (Powers).
Article 4.1 gives the NGB all powers needed to exercise its objects.
4.2
The income and property of the Company shall be applied solely
towards the promotion of its Objects and no portion thereof shall be
paid or transferred directly or indirectly, overtly or covertly by way of
distribution, bonus or otherwise by way of profit to the members of
the Company.
Article 4.2 provides that the income and property of the NGB shall be
used in furtherance of its objects and will not be paid by way of
distribution to its members. This provision can be important for the
purposes of obtaining rate relief; eligibility to receive Lottery funding
and grants from other grant-making bodies.
4.3
Nothing in Article 4.2 shall prevent the payment in good faith by the
Company:
7
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4.3.1
[of remuneration of any director of the Company in accordance with
Article 22 (directors' remuneration);]
4.3.2
to any director, committee or sub-committee member of reasonable
and proper out-of-pocket expenses incurred in the exercise of their
powers and the discharge of their responsibilities in relation to the
Company;
4.3.3
of interest on money lent by a member of the Company or its
directors at a commercial rate of interest;
4.3.4
of reasonable and proper rent for premises demised or let by any
member of the Company or by any director; [or]
4.3.5
of any premium in respect of the purchase and maintenance of
indemnity insurance in respect of liability for any act or default of the
directors (or any of them) in relation to the Company; [or]
4.3.6
[other payments as are permitted by these Articles].
5.
Liability of Members
Article 5 – Liability of members
5.1
The liability of each member is limited to [£1][insert the same
amount as currently appears in the guarantee in your
Memorandum of Association], being the amount that each member
undertakes to contribute to the assets of the Company in the event of
its being wound up while he is a member or within one year after he
ceases to be a member, for any of the items set out in Article 5.2.
The company's constitution must include a statement of guarantee that
each member shall contribute to the assets of the company if it should
be wound up while the individual is a member (or within one year after
the individual ceases to be a member) up to a specified maximum. The
maximum amount of the contribution must be included in the Articles
and must reflect your existing guarantee (often £1 or another nominal
sum).
5.2
The items for which the members undertake to contribute are:
5.2.1
payment of the Company's debts and liabilities contracted before he
ceases to be a member;
8
[Article 4.3.1 can be deleted if remuneration to any director of the
Company is not to be permitted].
It is worth emphasising that a member is not obliged to pay the sum
guaranteed while the company is a going concern, rather that the
liability only arises if a contribution is needed to pay the company's
debts when it is wound up.
\FARDM1\2579252.3
5.2.2
payment of the costs, charges and expenses of winding up; and
5.2.3
adjustment of the rights of the contributories among themselves.
PART 2
DIRECTORS AND OTHER OFFICE HOLDERS
The Board
Powers and Duties of the Board
DIRECTORS' POWERS AND RESPONSIBILITIES
6.
Directors' General Authority
6.1
Subject to these Articles, any Rules and Regulations made pursuant to
them and the 2006 Act, the Board is responsible for the management
of the Company's business, for which purpose it may exercise all the
Powers of the Company.
6.2
No resolution passed by the Company in general meeting shall
invalidate any prior act of the Board which would have been valid if
such resolution had not been passed.
7.
Directors May Delegate
7.1
Subject to these Articles, the Board may delegate any of the powers
which are conferred on it under these Articles:
7.1.1
to such person or committee;
7.1.2
by such means (including by power of attorney);
7.1.3
to such an extent;
7.1.4
in relation to such matters or territories; and
Articles 6 (directors' general authority), 7 (directors may delegate) and
8 (committees) set out the powers of the Board. The Board is
responsible for the management, administration and finances of the
NGB and therefore must have adequate powers and autonomy to fulfil
this responsibility without having to revert to the members to make
every decision. You may however already restrict the Board from
making certain decisions without first consulting the members and any
such reserved powers need to be set out in the Articles (e.g. Article 50
(rules) deals with Rules to be made by members). Note that a
restriction contained in the Articles can only be amended by Special
Resolution.
Although the Board must retain ultimate responsibility, it is perfectly
legitimate for it to delegate its powers to sub-committees which report
back, and make recommendations to, the Board. This is provided for in
Article 7 (directors may delegate).
The 2006 Act imposes specific statutory duties on directors of
companies. These duties are, broadly, to:
9
(i)
act in accordance with the company's constitution;
(ii)
promote the success of the company;
\FARDM1\2579252.3
7.1.5
7.2
7.3
on such terms and conditions;
(iii)
exercise independent judgment;
as it thinks fit.
(iv)
exercise reasonable care, skill and diligence;
All acts and proceedings delegated under Article 7.1 shall be reported
to the Board in due course.
(v)
avoid conflicts of interest;
(vi)
not accept benefits from third parties; and
(vii)
declare interests in proposed transactions.
[If the Board so specifies, any such delegation may authorise further
delegation of the Board's powers by any person to whom they are
delegated.]
7.4
The Board may revoke any delegation in whole or part, or alter its
terms and conditions.
8.
Committees
8.1
[The Company shall have the following committees:
8.1.1
[insert details of Committees, Councils or any regional councils];
and
8.1.2
such other committees as the Board thinks fit.]
8.2
Committees to which the Board delegates any of its powers must
follow procedures which are based as far as they are applicable on
those provisions of these Articles which govern the taking of
decisions by the Board.
8.3
The Board may make rules of procedure for all or any committees,
which prevail over rules derived from these Articles if they are not
consistent with them.
8.4
The quorum for meetings of any sub-committee formed pursuant to
the provisions of the Articles shall be [three] [insert other number].
10
It is outside of the scope of this Guidance Note to provide further detail
on the scope of these directors' duties. In the event of doubt, a director
should take separate legal advice on these duties.
\FARDM1\2579252.3
DECISION-MAKING BY DIRECTORS
9.
Decision-making by and Proceedings of the Board
Directors to Take Decisions Collectively
Any decision of the Board must be either a majority decision or a
decision taken in accordance with Article 10 (unanimous decisions).
10.
Unanimous Decisions
10.1
A decision of the Board is taken in accordance with this Article when
all eligible directors indicate to each other by any means that they
share a common view on a matter.
10.2
Such a decision may take the form of a resolution in writing, copies of
which have been signed by each eligible director or to which each
eligible director has otherwise indicated agreement in writing.
10.3
References in this Article to eligible directors are to directors who
would have been entitled to vote on the matter had it been proposed
as a resolution at a meeting of the Board.
10.4
A decision may not be taken in accordance with this Article if the
eligible directors would not have formed a quorum at such a meeting.
11.
Calling a Meeting of the Board
11.1
The Board may meet together for the dispatch of business, adjourn
and otherwise regulate their meetings as they think fit, provided that
at least [three] [insert other number] such meetings shall be held in
each year.
11.2
[The Board shall report on their activities to the members at the
annual general meeting.]
11
Articles 9 (directors to take decisions collectively) to 18 (directors'
discretion to make further rules) deal with the proceedings of the Board
and any of its sub-committees. These Articles are procedural and can
be varied to reflect the custom and practice of your NGB's
administration. Article 19.1 sets out the minimum and maximum
number of directors; you have flexibility to change these numbers in the
Articles. Article 13.2 sets the quorum of a board meeting of three
directors, although this position can be changed by the directors.
Article 11 (calling a meeting of the board) allows directors to attend
(and form part of the quorum for) a Board meeting remotely i.e. by
conference call etc.
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11.3
Any director may call a meeting of the Board by giving notice of the
meeting to the directors or by directing the [Secretary] to give such
notice.
11.4
Notice of any meeting of the Board must indicate:
11.4.1
its proposed date and time;
11.4.2
where it is to take place; and
11.4.3
if it is anticipated that directors participating in the meeting will not
be in the same place, how it is proposed that they should
communicate with each other during the meeting.
11.5
Notice of a meeting of the Board must be given to each director,
but need not be in writing. A director who is absent from Great
Britain shall be entitled to notice of a meeting if he has provided a
valid email address.
12.
Participation in Meetings of the Board
12.1
Subject to these Articles, directors participate in a meeting of the
Board, or part of a meeting of the Board, when:
12.1.1
the meeting has been called and takes place in accordance with these
Articles, and
12.1.2
they can each communicate to the others any information or opinions
they have on any particular item of the business of the meeting.
12.2
In determining whether directors are participating in a meeting of the
Board, it is irrelevant where any director is or how they communicate
with each other.
This Article deals with how directors may attend Board meetings
including remotely.
12
\FARDM1\2579252.3
12.3
If all the directors participating in a meeting of the Board are not in
the same place, they may decide that the meeting is to be treated as
taking place wherever any of them is.
13.
Composition of the Board and Quorum
13.1
At a meeting of the Board, unless a quorum is participating, no
proposal is to be voted on, except a proposal to call another meeting.
13.2
The quorum for meetings of the Board may be fixed from time to
time by a decision of the directors, but it must never be less than
[three], and unless otherwise fixed it is [three].
13.3
Subject to Article 13.4, the Board may act notwithstanding any
vacancy in their body.
13.4
If the total number of directors for the time being is less than the
quorum required, the directors must not take any decision other than a
decision:
Article 13.2 sets out the quorum at three directors, although this can be
changed by the directors.
[This Article must be consistent with Article 27 (casual vacancies).]
EITHER
13.4.1
to fill a casual vacancy arising among the directors in accordance with
Article 27 (casual vacancies);
OR
13.4.1
to call a general meeting so as to enable the members to fill a casual
vacancy arising among the directors in accordance with Article 27
(casual vacancies); or
13.4.2
to admit Voting Members to the Company.
13
\FARDM1\2579252.3
14.
Chairing of Meetings of the Board
14.1
The [Chair] [state who else if not the Chair] shall chair meetings of
the Board. The [Chair] shall preside as chair at all meetings of the
Board at which he shall be present.
14.2
If at any meeting the [Chair] is not present within [15] minutes after
the time appointed for holding the meeting or he is not willing to
preside, the [Vice-Chair] [state who else if not the Vice-Chair] shall
preside. If the Vice-Chair is also not present or is unwilling to preside
within [15] minutes of the time at which a meeting was due to start,
the members of the Board present shall choose one of their number to
be chair of the meeting. The person so appointed for the time being is
known as "the chair of the meeting".
15.
Casting Vote
The terminology "Chair" has been used in these Sample Articles but
you may prefer to use "Chairman".
If the numbers of votes for and against a proposal are equal, the chair
of the meeting of the Board has a casting vote. This does not apply if,
in accordance with these Articles, the chair or other director is not to
be counted as participating in the decision-making process for
quorum or voting purposes.
16.
Conflicts of Interest
16.1
Subject to Article 16.2, if a proposed decision of the Board is
concerned with an actual or proposed transaction or arrangement with
the Company in which a director is interested, that director is not to
be counted as participating in the decision-making process for
quorum or voting purposes.
16.2
The prohibition under Article 16.1 shall not apply when:
14
\FARDM1\2579252.3
16.2.1
the Board approves the director counting towards the quorum and
voting on the transaction or arrangement notwithstanding such
interest in accordance with Section 175 of the 2006 Act;
16.2.2
the director need not declare an interest pursuant to Section 177 or
182 of the 2006 Act; or
16.2.3
the director's conflict of interest arises from a permitted cause.
16.3
For the purposes of Article 16.2, the following are permitted causes:
16.3.1
a guarantee, security or indemnity given, or to be given, by or to a
director in respect of an obligation incurred by or on behalf of the
Company or any of its subsidiaries (if any);
16.3.2
[subscription, or an agreement to subscribe, for securities of the
Company or any of its subsidiaries (if any), or to underwrite, subunderwrite, or guarantee subscription for any such securities]; and
16.3.3
arrangements pursuant to which benefits are made available to
employees and directors or former employees and directors of the
Company or any of its subsidiaries (if any) which do not provide
special benefits for directors or former directors.
16.4
For the purposes of this Article 16 (conflicts of interest), references to
proposed decisions and decision-making processes include any
meeting of the Board or part of a meeting of the Board.
16.5
Subject to Article 16.7, if a question arises at a meeting of the Board
or of a committee of the Board as to the right of a director to
participate in the meeting (or part of the meeting) for voting or
quorum purposes, the question may, before the conclusion of the
meeting, be referred to the chair of the meeting whose ruling in
relation to any director other than himself is to be final and
conclusive.
15
[Use if you have subsidiaries or issue debentures.]
\FARDM1\2579252.3
16.6
Where proposals are under consideration concerning the appointment
of two or more directors to employment with the Company or any
body corporate in which the Company is interested the proposals may
be divided and considered in relation to each director separately and
(provided he is not for another reason precluded from voting) each of
the directors concerned shall be entitled to vote and be counted in the
quorum in respect of each resolution except that concerning his own
appointment.
16.7
If any question as to the right to participate in the meeting (or part of
the meeting) should arise in respect of the chair of the meeting, the
question is to be decided by a decision of the directors at that meeting,
for which purpose the chair of the meeting is not to be counted as
participating in the meeting (or that part of the meeting) for voting or
quorum purposes.
16.8
A director may vote, and count towards the quorum, in regard to any
transaction or arrangement in which he has, or can have, a direct or
indirect conflict of interest that conflicts, or possibly may conflict
with the interests of the Company only where such matter has been
authorised in accordance with Article 16.2.
16.9
The Company may by ordinary resolution suspend or relax to any
extent, either generally or in respect of any particular matter, any
provision of these Articles prohibiting a director from voting at a
meeting of the Board or a sub committee formed under Article 7
(directors may delegate).
16
\FARDM1\2579252.3
17.
Records of Decisions to be Kept
17.1
The Board must ensure that the Company keeps a record, in writing,
for at least ten years from the date of the decision recorded, of every
appointment by the Board and of every unanimous or majority
decision taken by the Board (and all sub-committees) and by the
Company at general meeting
17.2
Any such records, if purporting to be signed by the chair of the
meeting, or by the chair of the next succeeding meeting, shall be
sufficient evidence without any further proof of the facts therein
stated.
18.
Directors' Discretion to Make Further Rules
18.1
[The Board may from time to time [make, vary and revoke][propose
variations to, revocations of and new] Rules relating to membership
of the Company including (without limitation) Rules:
18.1.1
setting out different categories of membership of the Company;
18.1.2
setting out rights, privileges and obligations of the different categories
of member;
18.1.3
setting the levels of subscriptions or entrance fees to be paid by the
different categories of member;
18.1.4
for the appointment of committees to assist the Board in the better
administration of the Company.]
18.2
[Subject to Article 50 (rules),] The Board (or any sub-committee to
whom it delegates its powers) shall have the power to make, vary and
revoke Rules for the better administration of the Company including
(without limitation):
Unless you wish to change the delineation of responsibility as
between the Board and the members in your organisation, the Articles
below will need to be amended to reflect the existing responsibilities
for Rules as between the Board and the members.
[Use if Board makes Membership Rules.]
17
\FARDM1\2579252.3
18.2.1
terms as reference as to the function, role and operation of committees
to assist the Board in the better administration of the Company;
18.2.2
[regulations to ensure compliance with national and international
rules relating to doping control;]
18.2.3
regulations setting out disciplinary procedures for members;
18.2.4
regulations for the promotion and organisation of competitions;
18.2.5
[child protection policies];
18.2.6
[equity and equality policies;] and
18.2.7
such other regulations or policies as the Board thinks fit.
18.3
Rules and Regulations made under Articles 18.1 and 18.2 must be
compliant with the 2006 Act and these Articles in order to be valid.
APPOINTMENT OF DIRECTORS
Appointment and Removal of the Board
19.
Methods of Appointing Directors
19.1
[The number of directors shall be not less than [three] [insert other
number] and shall be subject to a maximum of [12][insert other
number].]
19.2
The members of the Board shall be: [you may want to replicate the
existing provisions within your Articles here]
Articles 19 (methods of appointing directors) and 20 (elected directors)
deal with the appointment of the directors (collectively known as the
Board). You will want to mirror your existing arrangements (unless
you want to use this as an opportunity to change things). Note that the
Sport England and UK Sport governance criteria for NGBs for the
2013-2017 funding cycle includes a requirement that, ideally, the
Board should not exceed 12 in number.
Most governing bodies are likely to have:
(a) some non-executive directors who are elected by the wider
membership (e.g. Elected Directors (see Article 19.2.8));
18
\FARDM1\2579252.3
19.2.1
[the Chair;]
19.2.2
[the Vice-Chair;]
19.2.3
[the [Honorary] Treasurer;]
19.2.4
[the Chief Executive;]
19.2.5
[the [Honorary] Secretary;]
19.2.6
[the [insert other];]
19.2.7
[up to [insert number consistent with Article 19.1] (or such lower
number as the Board shall from time to time decide) Appointed
Directors;]
19.2.8
(b) some non-executive directors who are appointed by the Board (e.g.
Appointed Directors (see Article 19.2.7) or the Chair, Honorary
Treasurer etc.); and
(c) individuals in executive roles (e.g. CEO, Company Secretary) (who
may or may not be on the Board) who are appointed by the Board (see
Articles 24 (Chief Executive) and 25 (Company Secretary)) .
Note that the Sport England and UK Sport governance criteria for
NGBs for the 2013-2017 funding cycle requires (inter alia):
up to [insert number consistent with Article 19.1] (or such lower
number as the Board shall from time to time decide) Elected
Directors; and
19.2.9
[up to [two] [insert other number consistent with Article 19.1] other
persons (if any) as the Board may from time to time in its sole
discretion co-opt to the Board [until the next annual general meeting],
provided that the total number of directors at any one time shall not
exceed the maximum number (if any) fixed by these Articles. Coopted directors shall be entitled to vote at the meetings of the Board
[and may be co-opted beyond their initial term [with the approval of
the Voting Members in general meeting]].]
19.3
[The Board may at its discretion award honoraria to such persons as it
thinks fit [provided that the honoraria shall not to any extent be
determined by or conditional upon the profits or losses derived from
some or all of the activities of the Company or by reference to the
level of the Company's gross income from some or all of its
19

at least 25% or ideally one third of the Board to be
"independent";

Board members to have a balance of skills and experience;
and

an open recruitment process for Board members.
We have not enshrined these principles in the Sample Articles on the
basis that open recruitment procedures for skilled independent
directors are perhaps more appropriately set out in your NGB's Rules
or Bye-Laws and because legally enshrining the fact that (e.g.) 25%
of directors have to be independent may cause inflexibility. If you do
wish to reference these principles in your NGB's Articles, bear in
mind that changing the Articles requires a Special Resolution (i.e. the
approval of 75% of your NGB's members).
We have drafted these Board provisions using references to Chair,
Vice-Chair, Treasurer, Secretary, Appointed Directors, Elected
Directors and Co-opted Directors. We are aware that terminology
varies from NGB to NGB and these provisions will need to be updated
to reflect the terminology used in your NGB. Note too that the methods
\FARDM1\2579252.3
activities].]
of appointing/ electing the Board varies from NGB to NGB and you
may want to lift your existing provisions and set them out here.
These provisions will need to be amended so they accurately reflect
how your NGB appoints its directors.
Where you do hold elections, it is likely to be important to retain the
provisions concerning an annual general meeting so that you have a
meeting at which to conduct these.
[Include wording in square brackets in Article 19.3 where your NGB
claims the VAT exemption.]
19.4
All acts carried out in good faith at any meeting of the Board or of
any sub-committee, or by any person acting as a director, shall,
notwithstanding it be afterwards discovered that there was some
defect in the appointment or continuance in office of any such person
be as valid as if every such person had been duly appointed or had
duly continued in office.
20.
Elected Directors
20.1
Subject to Article 27 (casual vacancies), each Elected Director shall
serve for a [insert period, e.g. four]-year term [from the annual
general meeting at which he is elected to the annual general meeting
in the [insert period, e.g. fourth] year after his election] [delete
wording in brackets if the elections will not be made at an AGM],
but shall be eligible for re-election for [one] further term[s] of [insert
period, e.g. four] year[s]. Up to [insert number, e.g. one] Elected
Director[s] shall be appointed at each annual general meeting on a
[four] year cycle.] [Always provided that:
20.1.1
[insert name[s]], [who are due to][shall] retire on the date of adoption
of these Articles, [and] shall be not be eligible for re-election;
20
It is usual for directors to retire from the Board after a certain period.
The Articles must make it clear for how long an officer or director
holds his office and whether or not he can be re-elected or re-appointed
after this period. These decisions will depend on the practice at your
NGB. Note that terms of office for directors should be limited,
normally to a maximum of 2 x 4 years, in order to comply with Sport
England and UK Sport governance criteria for NGBs for the 20132017 funding cycle.
In Article 20 we have provided that one Elected Director will be elected
each year at the AGM on a four year rotation cycle. You can amend
this drafting to reflect your existing set up.
Transitional Drafting: Elected Directors
We have included some example transitional drafting here in the event
that you have some existing Elected Directors who are:-
\FARDM1\2579252.3
20.1.2
20.1.3
[insert name[s]], [who are due to] [shall] retire at the annual general
meeting in 20[13] [and] shall be eligible for re-election at the annual
general meeting in 20[13] for a [four] year term and, if so re-elected,
such [four] year term shall be deemed to be their [first] term in office
for the purposes of this Article 20; and
[insert name[s]], [who are due to] [shall] retire at the annual general
meeting in 20[14] [and] shall be eligible for re-election at the annual
general meeting in 20[14] for a [four] year term and, if so re-elected,
such [four] year term shall be deemed to be their [second] term in
office for the purposes of this Article 20.]
20.2
The election for the office of Elected Directors shall be conducted in
accordance with Article 26 (elections).
21.
Termination of Director's Appointment
21.1
Without prejudice to the provisions of Section 168 of the 2006 Act, a
person shall cease to be a director of the Company as soon as:
21.1.1
that person ceases to be a director by virtue of any provision of the
Companies Act 2006 or is otherwise prohibited from being a director
by law;
21.1.2
a bankruptcy order is made against that person;
21.1.3
a composition is made with that person's creditors generally in
satisfaction of that person's debts;
21.1.4
a registered medical practitioner who is treating that person gives a
written opinion to the Company stating that that person has become
physically or mentally incapable of acting as a director and may
remain so for more than three months;
21.1.5
by reason of that person's mental health, a court makes an order which
wholly or partly prevents that person from personally exercising any
21
(a) either due to or shall be required to resign on the date of adoption
of the Articles and shall not be eligible for re election;
(b) either due to or shall be required to resign at the AGM in 20[13]
and shall be eligible for re election for [one] further term of [four]
years; or
(c) either due to or shall be required to resign at the AGM in 20[14]
and shall be eligible for re election for [two] further terms of [four]
years.
Article 21 (termination of director's appointment) deals with the
removal of directors and includes a relatively standard list of
circumstances in which a director must vacate his office, for example,
bankruptcy, resignation, mental disorder and absence from a stated
number of board meetings.
Article 21 (termination of director's appointment) does not include a
retirement age. Whilst historically the inclusion of a retirement age
was not unusual for companies and could have been seen as a tactful
means of ensuring that an officer does retire, the Equality Act 2010
now precludes including such a provision unless it can be justified
objectively. This is a technical legal question and you should take
specific legal advice on this point before including a retirement age in
your Articles (or Rules).
\FARDM1\2579252.3
powers or rights which that person would otherwise have;
21.1.6
[unless the Board resolves otherwise, that person shall without
sufficient reason for more than [three] consecutive Board meetings
have been absent without permission of the Board;]
21.1.7
[that person is requested to resign by [all] [75% of] the other members
of the Board acting together;]
21.1.8
[being the Chair, Vice-Chair, Treasurer or Secretary, when his term of
office expires and he is not re-elected;]
21.1.9
[that person ceases to be a member; or]
[Include Article 21.1.9 where directors are required to be members of
the Company.]
21.1.10 notification is received by the Board from the director that the
director is resigning from office, and such resignation has taken effect
in accordance with its terms.
21.2
A person serving as [Chair], [Vice-Chair], [Treasurer] or [Secretary]
who is removed from office as a director for whatever reason shall be
deemed to have resigned from his position as Chair, Vice-Chair,
Treasurer or Secretary (as appropriate) and the vacancy shall be filled
in accordance with these Articles.
22.
[Directors' Remuneration
(d)
22.1
[The Company shall not employ any director of the Company to
provide any services outside the scope of the ordinary duties of a
director and shall not pay any director any remuneration in relation to
his role on the Board.]
Article 22 (director's remuneration) should be tailored depending on
whether you intend to allow directors to be paid. Where you claim the
VAT exemption, please read the note in the Introduction to the Sample
Articles to ensure that this is appropriately tailored for your NGB.
Include Article 22.1 if you do not want the directors to receive
remuneration.
OR
22.2
Directors Remuneration and Expenses
[Subject to the provisions of the 2006 Act, and to Article 22.4 below,
the Board may enter into an agreement or arrangement with any
22
\FARDM1\2579252.3
director:
22.2.1
for his services to the Company as a director; and
22.2.2
for his employment by the Company or for the provision by him of
any services outside the scope of the ordinary duties of a director or
benefits.
22.3
Any appointment of a director to an executive office shall terminate if
he ceases to be a director but without prejudice to any claim for
damages for breach of the contract of service between the director and
the Company.
22.4
[Subject to these Articles, a director's remuneration may take any
form and include any arrangements in connection with the payment of
a pension, allowance or gratuity, or any death, sickness or disability
benefits, to or in respect of that director provided that such
remuneration:
22.4.1
is fixed having regard to the current remuneration of directors in
comparable posts;
22.4.2
does not exceed the general market rate for directors providing
comparable services; and
22.4.3
is not to any extent determined by or conditional upon the profits or
losses derived from some or all of the activities of the Company or by
reference to the level of the Company's gross income from some or all
of its activities.]
22.5
Unless the Board decides otherwise, directors' remuneration accrues
from day to day.]
22.6
Unless the Board decides otherwise, directors are not accountable to
the Company for any remuneration which they receive as directors or
other officers or employees of the Company's subsidiaries (if any) or
23
[Include Article 22.4 where you claim the VAT exemption on
members subscriptions.]
\FARDM1\2579252.3
of any other body corporate in which the Company is interested (if
any).]
23.
[Office Holder, e.g. Chair]
[EITHER if the office holder is elected in general meeting]
23.1
23.1.1
[At the annual general meeting in [insert year Chair is next due to
retire] and at the annual general meeting [each] [every [insert other
period]] year thereafter,] OR [On [insert date] and [each][every
[insert other period, e.g. four years]]] anniversary thereof], the Chair
shall retire but shall be eligible for re election [for [one] further
term[s] of [insert period, e.g. four] year[s]] [in accordance with these
Articles]. The election of the Chair shall be in accordance with
Article 26 (elections). A person so elected shall hold office [for a
[insert period, e.g. four year] term] [until the annual general meeting
in the [insert period, e.g. fourth] year after his election] but shall be
eligible for re-election in accordance with these Articles[.][, save
that:]
[the Chair on the date of adoption of these Articles shall be required
to resign [on the date of adoption of these Articles and shall not be
eligible for re-election] [at the annual general meeting in 20[13] but
shall be eligible for re-election at the annual general meeting in
20[13] for a [four] year term and, if so re-elected, such [four] year
term shall be deemed to be his [second] term in office for the
purposes of this Article 23.1] [at the annual general meeting in 20[14]
but shall be eligible for re-election at the annual general meeting in
20[14] for a [four] year term and, if so re-elected, such [four] year
term shall be deemed to be his [first] term in office for the purposes
of this Article 23.1].
24
Sample Article 23 ([office holder, e.g. chair]) sets out alternative
provisions allowing for the election or appointment of an Office
Holder (ie President, Chair, Vice-Chair, Treasurer and Secretary).
Again, consider whether the terminology is appropriate for your
NGB.
Other Appointments
Many NGBs have office holders (e.g. President, Treasurer, Chair and
Secretary) some of whom may be directors and others of whom may not
be. You will need to ensure that the Articles accurately reflect which
office holders exist; how they are appointed/elected and whether they
are also directors by virtue of that office. This section is likely to be the
one which needs amending the most to reflect your existing set up.
Transitional Drafting: Elected Office Holders
We have included some example transitional drafting here in the event
that you have existing office holders who are:(a) either due to or shall be required to resign on the date of adoption
of the Articles and shall not be eligible for re election;
(b) either due to or shall be required to resign at the AGM in 20[13]
and shall be eligible for re election for [one] further term of [four]
years; or
(c) either due to or shall be required to resign at the AGM in 20[14]
and shall be eligible for re election for [two] further terms of [four]
years.
\FARDM1\2579252.3
23.2
The Chair [shall be a director by virtue of his office and] shall have
such rights and privileges as the [Board][Company in general
meeting] shall from time to time prescribe.
[OR - if the office holder is appointed by the Board
23.1
The Board may appoint [an Elected Director or a Co-opted
Director][a person] to be the Chair on such terms [and for such
period] as they think fit and may delegate to him such of their powers
as they think desirable to be executed by him. [The Board may
delegate their power of appointment to an Appointments Panel set
up for the purpose.]
23.2
[The Chair shall hold office for a [insert period, e.g. four]-year term
[from the Board meeting at which he is appointed until the [insert
period, e.g. fourth] anniversary of the date of his appointment], but
shall be eligible for re-appointment for [one] further term[s] of [insert
period, e.g. four] year[s][.][, save that:]
23.2.1
[the Chair on the date of adoption of these Articles shall be required
to resign [on the date of adoption of these Articles and shall not be
eligible for re appointment] [at the annual general meeting in 20[13]
but shall be eligible for re appointment at the annual general meeting
in 20[13] for a [four] year term and, if so re appointed, such [four]
year term shall be deemed to be his [second] term in office for the
purposes of this Article 23.1] [at the annual general meeting in 20[14]
but shall be eligible for re appointment at the annual general meeting
in 20[14] for a [four] year term and, if so re appointed, such [four]
year term shall be deemed to be his [first] term in office for the
purposes of this Article 23.1].
25
You will want to make sure that there is a balance between those who
are elected to office by the members of the organisation and those
where appointed to ensure that certain skills (e.g. financial/
administrative) are present on the Board. If you have an Appointments
Panel which assists with appointments this should be reflected in the
Articles.
Transitional Drafting: Appointed Office Holders
We have included some example transitional drafting here in the event
that you have some existing office holders who are:(a) either due to or shall be required to resign on the date of adoption
of the Articles and shall not be eligible for re appointment;
(b) either due to or shall be required to resign at the AGM in 20[13]
and shall be eligible for re appointment for [one] further term of [four]
years; or
(c) either due to or shall be required to resign at the AGM in 20[14]
and shall be eligible for re appointment for [two] further terms of
[four] years.
\FARDM1\2579252.3
23.3
The Chair [shall be a director by virtue of his office and] shall have
such rights and privileges as the [Board][Company in general
meeting] shall from time to time prescribe.]
23.4
The office of Chair shall be vacated with immediate effect if the
person appointed as Chair ceases to be a director of the Company.
24.
[Chief Executive
[Subject to the provisions of the 2006 Act, the Chief Executive shall
be appointed by the Board for such term at such remuneration and
upon such conditions as they may think fit and any Chief Executive
appointed may be removed by them.]
25.
[Company Secretary]
[Companies are no longer required to appoint a Company Secretary
but if you wish to do so you should include this Article if the
Secretary will not also be the company secretary]
[Subject to the provisions of the 2006 Act, the [Company] Secretary
shall be appointed by the Board for such term at such remuneration
and upon such conditions as they may think fit and any company
secretary appointed may be removed by them.]
26
Article 24 ([chief executive]) provides for the appointment of a Chief
Executive and will need to be amended to reflect any process there is
for that appointment.
We have provided for a Company Secretary in Article 25 ([company
secretary]) even though under the 2006 Act, there is no statutory
requirement to appoint a company secretary. However, it is important
to ensure that responsibility for the proper conduct of the NGB's
constitutional and administrative affairs (including Companies House
filings) is delegated to a responsible individual and we therefore advise
that a company secretary is appointed. The Articles will need to reflect
whether or not the Secretary is also the company secretary.
\FARDM1\2579252.3
26.
Elections
26.1
[Subject to Article 26.2,] any [Voting Member] [insert who else may
nominate] [this is the default position and is subject to specific
requirements for particular positions (if any) as set out in Article
26.2. If no special requirements will apply, Article 26.2 can be
deleted] may nominate [another member][individuals] to be
[Treasurer], [Secretary] or an Elected Director. Any nomination must
be made on the form prescribed from time to time by the Board and
signed by the nominee. Any nomination must be seconded by
[another Voting Member] [insert who else may second]. [Voting
Members] [insert who else may nominate/second] may only
nominate or second one candidate for each post and the form must be
completed and returned to the [Secretary] not later than such date as
the Board shall prescribe each year.
26.2
In respect of the following appointments, the following provisions
shall apply:
26.2.1
in relation to the appointment of the [Treasurer], nominations may be
made by the [Board][Appointments Panel]; and
26.2.2
in relation to the appointment of the [Secretary], nominations may be
made by the [Board][Appointments Panel].
26.3
If there are the same number of candidates as there are vacancies for a
post, those candidates shall be declared elected unopposed [at the
annual general meeting]. In the event of there being more
nominations than vacancies, there shall be an election [at the annual
general meeting] or a postal ballot in accordance with the provisions
of Article 41 (postal ballot) as directed by the Board. The results of
any such election must be announced [at the annual general
meeting][by the Board].
27
Articles 26 (elections) and 27 (casual vacancies) deal with Elections
and Casual Vacancies and again will need to be tailored to reflect your
current practice.
\FARDM1\2579252.3
27.
Casual Vacancies
A casual vacancy arising among the offices of [Chair] [Treasurer]
[Chief Executive] [Secretary] [Appointed Director] or an Elected
Director, shall be filled by [the Board] [the Company in general
meeting] provided always that the person appointed to fill the vacancy
shall hold office until such time as the person he replaced was due to
retire but shall be eligible for re-election in accordance with these
Articles.
PART 3
MEMBERS
BECOMING AND CEASING TO BE A MEMBER
Membership
(a)
28.
Applications for Membership
28.1
The subscribers to the Memorandum of Association of the Company
as at the date of incorporation; and such other persons as are admitted
to membership by [the Board][the Company in general meeting] in
accordance with these Articles (and any applicable Rules), shall be
the Voting Members of the Company.
28.2
No person shall become a member of the Company unless:
28.2.1
that person has completed an application for membership in such
form as [required by the Board] [set out in the Rules], and
28.2.2
[the Board][the Company in general meeting] has approved the
application.
28.3
Every corporation and unincorporated association which is admitted
as a Voting Member may exercise such powers as are prescribed by
Part 9 of the 2006 Act.
28
Applications for Membership and Categories of Members
Articles 28 (applications for membership) to 30 (termination of
membership) deal with membership and are important to establish the
members of the NGB and the legal relationship between the members
and the NGB.
To determine who the current Voting Members of your NGB are, you
should consider who is entitled to vote at your annual general meeting.
Please note that where Clubs nominate a person to come to general
meetings, it is the Club which should be the voting member and not the
individual concerned.
The Articles specifically allow an
unincorporated association to be a member of the new company.
Article 28 (applications for membership) sets out who the members of
the NGB are and how new members are admitted. You may have
different categories of membership, for example Associate Members
and Non-Voting Members. These different categories of membership
(including the requirements for membership, the rights, privileges and
obligations of each category of member) will need to be set out in the
Rules.
\FARDM1\2579252.3
28.4
The Board may from time to time fix the levels of entrance fees and
annual subscriptions to be paid by the different categories of
members.
29.
Conditions of Membership
29.1
All members shall be subject to the Rules.
29.2
The members shall pay any entrance fees and annual subscription set
by the Board under Article 28.4. Any member whose subscriptions
and/or entrance fee is more than [insert] months in arrears shall be
deemed to have resigned his membership of the Company unless the
[Board][Executive Company] decides otherwise.
In addition to Voting Members you are likely to have some Non-Voting
Members and the Articles will need to distinguish between them.
Article 1 (defined terms) does this by defining Voting Members and
Non-Voting Members. If there is no such distinction at your NGB,
wherever the Articles refer to either Voting or Non-Voting Members,
these references can simply be replaced with the general definition
members.
Article 28 (applications for membership) provides that the Board has
the power to admit members. It is usual for the Board to have this
discretion.
(b)
Subscriptions
If you set a membership/subscription fee to raise finances, you will
need to include a provision about this in the Articles.
30.
Termination of Membership
30.1
It shall be the duty of the Board, if at any time it shall be of the
opinion that the interests of the Company so require, by notice in hard
copy form sent by prepaid post to a member's address, to request that
member to withdraw from membership of the Company within a time
specified in such notice. No such notice shall be sent except on a vote
of the majority of the directors present and voting, which majority
shall include one half of the total number of the [Board] [Executive
Committee] for the time being.
29
Article 28.4 provides that the Board may set the entrance fees and
annual subscriptions, but the precise detail about fees and
subscriptions payable from time to time should be set out in the Rules.
Although the Articles of an NGB could provide that subscriptions and
entry fees are to be set by the members at the AGM each year, as the
directors are responsible for the administration and finances of the
NGB, it is better for the Board/Executive Committee to set the entry
fees and subscriptions. It may, for example, be that in any given year
the Board/Executive Committee needs to raise a higher fee to cover
unforeseen costs.
\FARDM1\2579252.3
30.2
If, on the expiry of the time specified in such notice, the member
concerned has not withdrawn from membership by submitting notice
in hard copy form of his resignation, or if at any time after receipt of
the notice requesting him to withdraw from membership the member
shall so request in hard copy form, the matter shall be submitted to a
properly convened and constituted meeting of the Board [or such subcommittee to which it has delegated its powers]. The Board [or subcommittee] and the member whose expulsion is under consideration
shall be given at least 14 days' notice of the meeting, and such notice
shall specify the matter to be discussed. The member concerned shall
at the meeting be entitled to present a statement in his defence either
verbally or in hard copy form, and he shall not be required to
withdraw from membership unless a majority of the Board members
[or sub-committee members] present and voting shall, after receiving
the statement in his defence, vote for his expulsion, or unless the
member fails to attend the meeting without sufficient reason being
given. If such a vote is carried, or if the member shall fail to attend
the meeting without sufficient reason being given, he shall thereupon
cease to be a member and [in the case of a Voting Member] his name
shall be erased from the register of members. [The Board may
exclude the member from the Company's premises until the meeting
considering his expulsion has been held. For the avoidance of doubt,
the member shall be entitled to attend the Company's premises to
attend that meeting (if it is held at them) for the purpose of making his
representations.] [A Member may appeal against such decision by
notifying the Board who shall put the matter to a general meeting for
it to be decided by a majority vote of the members present and voting
at such meeting. If the Board's decision is upheld, the member will be
liable for the costs of holding the general meeting.]
30
If certain categories of member do not have to pay subscriptions or
entrance fees, this needs to be made clear in the Rules.
Article 29.2 provides that membership shall cease in the event of nonpayment of the annual subscription. There can be a period during
which the Board exercises its discretion to allow a member to remain,
but this must be clearly stated and a cut-off point inserted. You need to
decide how long after the subscription has not been paid the deemed
withdrawal from membership takes place. You should note that
withdrawal from membership does mean that the member's entitlement
to any benefits provided as a result of membership of the NGB (for
example insurance cover) ceases.
(c)
Expulsion
Unless the NGB has an Article allowing expulsion, a member cannot be
expelled and it is therefore sensible to include the provisions of Article
29 (conditions of membership), which sets out a process to do so. It is
important (from the point of view of fairness) that a member whom the
Board wants to expel has the opportunity to answer the complaints
against him before a decision to expel him is taken and any relevant
disciplinary procedure will need to be followed.
\FARDM1\2579252.3
30.3
A member may withdraw from membership of the Company by
giving [[seven][insert other period] clear days' notice to the Company
in writing][notice in accordance with the Rules].
30.4
A membership terminates automatically when that person dies or
ceases to exist or on the failure of the member to comply or to
continue to comply with any condition of membership set out in these
Articles or the Rules or Regulations.
30.5
Membership is not transferable.
30.6
Any person ceasing to be a member forfeits all rights in relation to
and claims upon the Company, its property and its funds and has no
right to the return of any part of his subscription. [The Board may
refund an appropriate part of a resigning member's subscription if it
considers it appropriate taking account of all the circumstances.]
(d)
Resignation
It is useful to provide a specific mechanism by which a member may
withdraw from membership. Article 30.3 does this.
(e)
Effect of Resignation or Expulsion
Article 30.6 makes it clear that when a person ceases to be a member
he forfeits all right to and claims upon the NGB, its property and funds.
ORGANISATION OF GENERAL MEETINGS
31.
Notice of and Calling General Meetings
General Meetings
31.1
General meetings are called on at least 14 clear days' written notice
(a)
31.2
A general meeting may be called at any time by the Board or by the
Secretary acting on behalf of the Board or may be called on a written
request to the Board from at least 5% of the Voting Members.
31.3
On receipt of a written request made pursuant to Article 31.1, the
Secretary must call a general meeting within 21 days and the general
meeting must be held not more than 28 days after the date of the
notice calling the general meeting
The 2006 Act provides for a minimum notice period for all general
meetings of 14 clear days (rather than 21 clear days as was the case
under the Companies Act 1985). This is reflected in Article 31 (notice
of calling general meetings). If, however, your NGB prefers to specify
a longer period for general meetings, you are free to do so. You should
ensure that whichever period you choose, your Articles and Rules are
consistent.
31
No legal requirement
\FARDM1\2579252.3
32.
Annual General Meetings
[There is no longer an obligation for companies limited by
guarantee to hold an AGM. However, it is likely to provide a useful
opportunity for reporting to the members and dealing with
administrative requirements]
32.1
[The Company shall hold a general meeting in every calendar year as
its annual general meeting at such time and place as may be
determined by the Board and shall specify the meeting as such in the
notices calling it, provided that so long as the Company holds its first
annual general meeting within 18 months after its incorporation it
need not hold it in the calendar year of its incorporation or in the
following calendar year.]
32.2
[The annual general meeting shall be held for the following purposes:
32.2.1
to receive from the Board the Company's accounts;
32.2.2
to receive from the Board a report of the activities of the Company
since the previous annual general meeting;
32.2.3
to appoint the Company's auditors;
32.2.4
[to receive a report from the President;]
32.2.5
to appoint (as appropriate) the [President], [President-Elect], [VicePresidents], [Captain], [Treasurer], [Secretary] and the Chair;
32.2.6
to elect the Elected Directors in place of those retiring; and
32.2.7
to transact such other business as may be brought before it.
32
Under the 2006 Act, there is no longer a legal requirement for private
companies to hold an annual general meeting (an AGM) and Article 32
(annual general meetings) will not be necessary if the NGB decides not
to hold AGMs. We do however recommend that NGBs which have a
large membership or for whom the AGM is an important forum
continue to hold one as it provides a useful forum for the transaction of
routine business on an annual basis (e.g. the election of officers) and to
report to and update members generally, it is also likely to be a more
convenient method of obtaining members' consent than circulating
written resolutions to individual members for signature.
The Articles have therefore been drafted in such a way as to retain the
requirement to hold an annual general meeting, but with these sections
marked in square brackets. Note that the 2006 Act does not allow an
NGB to waive holding an AGM where it is required to do so under its
Articles.
For NGBs that will retain the AGM, Article 32.2 sets out an illustrative
list of business to be transacted at the AGMs. There may be other
business which the NGB usually transacts at its AGMs which you may
wish to include. General meetings may be held between AGMs (where
applicable), to ensure that matters requiring members' consent may be
dealt with as and when the need arises.
The 2006 Act (as amended) provides that the members holding 5% of
the voting rights in the company are able to requisition a general
meeting.
\FARDM1\2579252.3
32.3
[All general meetings, other than annual general meetings, shall be
called general meetings.] [this wording will be unnecessary if the
Company decides not to hold annual general meetings] [The
Company shall hold at least [insert number] general meetings in each
calendar year after its year of incorporation. The business of such
general meetings shall be decided by the Board subject to due notice
having been given].
33.
Attendance and Speaking at General Meetings
33.1
[A person is able to exercise the right to speak at a general meeting
when that person is in a position to communicate to all those
attending the meeting, during the meeting, any information or
opinions which that person has on the business of the meeting.]
[Consider whether presence by conference call etc is desirable]
33.2
A person is able to exercise the right to vote at a general meeting
when:
33.2.1
that person is able to vote, during the meeting, on resolutions put to
the vote at the meeting, and
33.2.2
that person's vote can be taken into account in determining whether or
not such resolutions are passed at the same time as the votes of all the
other persons attending the meeting.
33.3
The Board may make whatever arrangements they consider
appropriate to enable those attending a general meeting to exercise
their rights to speak or vote at it.
33.4
[In determining attendance at a general meeting, it is immaterial
whether any two or more members attending it are in the same place
as each other.]
33
\FARDM1\2579252.3
33.5
[Two or more persons who are not in the same place as each other
attend a general meeting if their circumstances are such that if they
have (or were to have) rights to speak and vote at that meeting, they
are (or would be) able to exercise them.]
34.
Quorum for General Meetings
(b)
34.1
No business other than the appointment of the chair of the meeting is
to be transacted at a general meeting if the persons attending it do not
constitute a quorum.
34.2
[Subject to Article 37.6,][insert number] [Voting Members] present
in person or by proxy shall be a quorum.[it is generally preferable to
have a set number to reflect the number of members who attend the
AGM. This number should not be set so high that it will be difficult
to hold a quorate meeting]
Before the members can transact any business at a general meeting, a
quorum (i.e. minimum number) of members must be present. Article 34
(quorum for general meetings) provides for this. A quorum of 10% of
your members is relatively usual although you could change this or
provide that a stated number of members will constitute a quorum.
This number should be a realistic number, as the meeting cannot
proceed to business if the quorum is not present, but should be large
enough to stop the NGB being run by a small minority.
35.
Chairing General Meetings
35.1
The [Chair] [insert other person if applicable] shall chair general
meetings if present and willing to do so. If the [Chair] shall be absent,
or if at any meeting he is not present within [15] minutes after the
time appointed for holding the same, the [Vice-President] [insert
other person if applicable] shall preside. If the [Vice-President] is
also not present or is unwilling to preside within [15] minutes of the
time at which a meeting was due to start the directors present, or if no
directors are present), the meeting, must appoint a director [or
member] to chair the meeting, and the appointment of the chair of the
meeting must be the first business of the meeting.
35.2
The person chairing a meeting in accordance with this Article is
referred to as the chair of the meeting.
34
Procedures at General Meetings
Precedent Articles 33 (attendance and speaking at general meetings) to
45 (written resolution) deal with the detail of proceedings at general
meetings, including, for example, when meetings should be adjourned
and how votes are taken. The Articles provide that a poll may be
demanded by the Chair of the meeting or by at least two Voting
Members (see Article 40 (poll votes)). A vote must be decided by
simple majority and; unless the Chair had a casting vote prior to 1
October 2007 which is to be retained, the Chair must not have a
casting vote.
\FARDM1\2579252.3
36.
Attendance and Speaking by Directors and Non-Members
36.1
Directors may attend and speak at general meetings, whether or not
they are members.
36.2
The chair of the meeting may permit other persons who are not
members of the company to attend and speak at a general meeting.
37.
Adjournment
37.1
If the persons attending a general meeting within half an hour of the
time at which the meeting was due to start do not constitute a quorum,
or if during a meeting a quorum ceases to be present, the chair of the
meeting must adjourn it.
37.2
The chair of the meeting may adjourn a general meeting at which a
quorum is present if:
37.2.1
the meeting consents to an adjournment, or
37.2.2
it appears to the chair of the meeting that an adjournment is necessary
to protect the safety of any person attending the meeting or ensure
that the business of the meeting is conducted in an orderly manner.
37.3
The chair of the meeting must adjourn a general meeting if directed to
do so by the meeting.
37.4
When adjourning a general meeting, the chair of the meeting must:
37.4.1
either specify the time and place to which it is adjourned or state that
it is to continue at a time and place to be fixed by the directors, and
37.4.2
have regard to any directions as to the time and place of any
adjournment which have been given by the meeting.
35
\FARDM1\2579252.3
37.5
If the continuation of an adjourned meeting is to take place more than
14 days after it was adjourned, the Company must give at least seven
clear days' notice of it ):
37.5.1
to the same persons to whom notice of the Company's general
meetings is required to be given, and
37.5.2
containing the same information which such notice is required to
contain.
37.6
No business may be transacted at an adjourned general meeting which
could not properly have been transacted at the meeting if the
adjournment had not taken place provided that if at such adjourned
meeting a quorum is not present within half an hour from the time
appointed for holding the meeting [insert (not less than two)] Voting
Members shall be a quorum.
VOTING AT GENERAL MEETINGS
Does each Voting Member have one vote? Do some members have
more votes than others? Ensure that this is set out clearly in this
Article or in the Rules relating to Membership.
38.
Voting: General
38.1
Every Voting Member shall be entitled to receive notice of, attend
general meetings and cast [one vote] [the number of votes to which he
is entitled to cast in accordance with the Rules].
38.2
A resolution put to the vote of a general meeting must be decided on a
show of hands unless a poll is duly demanded in accordance with
these Articles. Except where otherwise provided by the Companies
Act, every resolution is decided by a majority of votes cast.
38.3
[In the event of an equality of votes either on a show of hands or a
poll, the Chair is entitled to a casting vote in addition to any other
vote he may have.]
38.4
[Every Voting Member is entitled to send [insert] representative[s] to
general meetings [but only one] [and each] of those representatives
36
(c)
Votes of Members
Article 38 (voting: general) should indicate how many votes a member
is entitled to. If every member is entitled to one vote, then obviously
there is no need to make a distinction in the Articles between Voting
Member and Non-Voting Members, and this Article can therefore be
amended to reflect this.
The 2006 Act requires that a member is entitled to appoint a proxy to
exercise all of his rights to attend, vote (on a show of hands and on a
poll) and speak at the meeting. These rights cannot be excluded. It is
possible for the Articles to require the person appointed as proxy not to
be somebody who has been excluded as a member should the NGB so
\FARDM1\2579252.3
shall have a vote.]
desire.
39.
Errors and Disputes
[You may only include a Chair’s casting vote if your Articles provided
for this prior to 1 October 2007. The terms of the casting vote must
remain the same.]
39.1
No objection may be raised to the qualification of any person voting
at a general meeting except at the meeting or adjourned meeting at
which the vote objected to is tendered, and every vote not disallowed
at the meeting is valid.
39.2
Any such objection must be referred to the chair of the meeting whose
decision is final.
40.
Poll Votes
40.1
A poll on a resolution may be demanded:
40.1.1
in advance of the general meeting where it is to be put to the vote, or
40.1.2
at a general meeting, either before a show of hands on that resolution
or immediately after the result of a show of hands on that resolution is
declared.
40.2
A poll may be demanded by:
40.2.1
the chair of the meeting;
40.2.2
the Board; or
40.2.3
[two][insert other number, this cannot exceed five members] or
more Voting Members present in person or proxy having the right to
vote on the resolution or, if less, a person or persons representing not
less than one-tenth of the total voting rights of all the members having
the right to vote on the resolution.
37
\FARDM1\2579252.3
40.3
A demand for a poll may be withdrawn if:
40.3.1
the poll has not yet been taken, and
40.3.2
the chair of the meeting consents to the withdrawal.
40.4
Polls shall be taken as the chair directs and he may appoint scrutineers
(who need not be members) and fix a time and place for declaring the
result of the poll. The result of the poll shall be deemed to be the
resolution of the meeting at which the poll was demanded.
40.5
A poll demanded on the election of a chair or on a question of
adjournment shall be taken forthwith. A poll demanded on any other
question shall be taken either forthwith or at such time and place as
the chair directs not being more than 30 days after the poll is
demanded. The demand for a poll shall not prevent the continuance
of a meeting for the transaction of any business other than the
question on which the poll was demanded. If a poll is demanded
before the declaration of the result of a show of hands and the demand
is duly withdrawn, the meeting shall continue as if the demand had
not been made.
40.6
No notice need be given of a poll not taken forthwith if the time and
place at which it is to be taken are announced at the meeting at which
it is demanded. In any other case at least seven clear days' notice
shall be given specifying the time and place at which the poll is to be
taken.
41.
[Postal Ballot
41.1
The Board may decide, in advance of a general meeting, to call a
postal ballot in respect of an election which would otherwise be put to
the vote at the general meeting. If there is to be a postal ballot, the
details of the resolution and voting papers shall be sent at such time as
the Board shall prescribe to the Voting Members. Voting papers must
be returned to the Secretary in a sealed envelope by such time as the
38
\FARDM1\2579252.3
Board shall prescribe and shall be opened and counted by such person
or persons as the Board shall decide.
41.2
The result of the postal ballot will be declared [at the general meeting
at which it would otherwise have been put to the vote][by the Board].]
42.
Content of Proxy Notices
(d)
42.1
Proxies may only validly be appointed by a notice in writing (proxy
notice) which:
42.1.1
states the name and address of the member appointing the proxy;
Articles 42 (content of proxy notices) and 43 (delivery of proxy notices)
set out the matters that a proxy notice must include to be valid and give
the NGB rights to require the proxy notices to be delivered in a
particular form. For ease and consistency, we suggest that you use the
form of proxy wording annexed to these guidance notes.
42.1.2
identifies the person appointed to be that member's proxy and the
general meeting in relation to which that person is appointed;
42.1.3
is signed by or on behalf of the member appointing the proxy, or is
authenticated in such manner as the directors may determine; and
42.1.4
is delivered to the Office in accordance with these Articles and any
instructions contained in the notice of the general meeting to
which they relate.
42.2
The Board may require proxy notices to be delivered in a particular
form, and may specify different forms for different purposes.
42.3
Proxy notices may specify how the proxy appointed under them is to
vote (or that the proxy is to abstain from voting) on one or more
resolutions.
42.4
Unless a proxy notice indicates otherwise, it must be treated as:
42.4.1
allowing the person appointed under it as a proxy discretion as to how
to vote on any ancillary or procedural resolutions put to the meeting,
39
Proxies
\FARDM1\2579252.3
and
42.4.2
appointing that person as a proxy in relation to any adjournment of
the general meeting to which it relates as well as the meeting itself.
43.
Delivery of Proxy Notices
43.1
A person who is entitled to attend, speak or vote (either on a show of
hands or on a poll) at a general meeting remains so entitled in respect
of that meeting or any adjournment of it, even though a valid proxy
notice has been delivered to the Office by or on behalf of that person.
43.2
An appointment under a proxy notice may be revoked by delivering
to the Office a notice in writing given by or on behalf of the person by
whom or on whose behalf the proxy notice was given.
43.3
A notice revoking a proxy appointment only takes effect if it is
delivered before the start of the meeting or adjourned meeting to
which it relates.
43.4
If a proxy notice is not executed by the person appointing the proxy, it
must be accompanied by written evidence of the authority of the
person who executed it to execute it on the appointor's behalf.
44.
Amendments to Resolutions
44.1
An ordinary resolution to be proposed at a general meeting may be
amended by ordinary resolution if:
44.1.1
notice of the proposed amendment is given to the Company in writing
by a person entitled to vote at the general meeting at which it is to be
proposed not less than 48 hours before the meeting is to take place (or
such later time as the chair of the meeting may determine), and
44.1.2
the proposed amendment does not, in the reasonable opinion of the
40
\FARDM1\2579252.3
chair of the meeting, materially alter the scope of the resolution.
44.2
A special resolution to be proposed at a general meeting may be
amended by ordinary resolution, if:
44.2.1
the chair of the meeting proposes the amendment at the general
meeting at which the resolution is to be proposed, and
44.2.2
the amendment does not go beyond what is necessary to correct a
grammatical or other non-substantive error in the resolution.
44.3
With the consent of the chair of the meeting, an amendment may be
withdrawn by its proposer at any time before the resolution is voted
upon.
44.4
If the chair of the meeting, acting in good faith, wrongly decides that
an amendment to a resolution is out of order, the chair's error does not
invalidate the vote on that resolution.
45.
Written Resolution
(e)
45.1
Subject to Article 45.3, a resolution in writing agreed by the
Appropriate Majority of members who would have been entitled to
vote upon it had it been proposed at a general meeting shall be
effective provided that a copy of the proposed resolution has been
sent to every eligible member and the Appropriate Majority of
members has signified its agreement to the resolution in an
authenticated document which has been received at the registered
office within the period of 28 days beginning with the circulation
date. A resolution in writing may comprise several copies to which
one or more members have signified their agreement. [In the case of
a member that is an organisation, its authorised representative may
signify agreement.]
The 2006 Act permits resolutions to be signed in writing without the
need for a general meeting. Under the previous legislation, these
written resolutions were required to be passed by every single member
of the company. The new provisions provide that the resolutions are
passed if the appropriate majority (more than 50% for an Ordinary
Resolution or 75% for a Special Resolution) signed the written
resolution approving the passing of the resolution.
45.2
Written Resolutions
Written resolutions require a specific form of wording and specific
legal advice should be taken in the event that you wish to circulate a
written resolution of the members.
As noted above, unless your NGB has a very small membership, it is
likely that convening a general meeting will be the most convenient
means of proposing resolutions to members. Article 45 (written
In Article 45.1, the Appropriate Majority is:
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resolution) sets out the provisions concerning written resolutions.
45.2.1
in the case of an ordinary resolution, a simple majority of the
members;
45.2.2
in the case of a special resolution, 75% or more of the members.
45.3
The following may not be passed as a written resolution:
45.3.1
a resolution to remove a director before his period of office expires;
and
45.3.2
a resolution to remove an auditor before his period of office expires.
PART 4
ADMINISTRATIVE ARRANGEMENTS
46.
Means of Communication to be Used
Notices and Communications
46.1
Subject to these Articles, anything sent or supplied by or to the
Company under these Articles may be sent or supplied in any way in
which the 2006 Act provides for documents or information which are
authorised or required by any provision of the 2006 Act to be sent or
supplied by or to the Company.
Article 46 (means of communication to be used) enables the NGB to
communicate with the members in hard copy form (paper); electronic
form (email, fax, or disc) or by means of its website.
46.2
The applicable address shall be:
46.2.1
in the case of a Voting Member at his registered address as it appears
in the register of members or by giving notice using electronic
communications to an address for the time being notified to the
Company by the Voting Member[; and
46.2.2
in the case of a Non-Voting Member, at his last known address].
46.3
Subject to these Articles, any notice or document to be sent or
supplied to a member of the Board in connection with the taking of
42
In order for the NGB to communicate with its members electronically
or through its website, the NGB must, however, obtain consent from
each individual member. There is therefore an administrative process
to go through before the NGB can communicate with its members in
electronic form or through its website.
Legal advice should be sought to ensure that all relevant aspects of the
legislation (particularly as to consent) are complied with.
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decisions by the Board may also be sent or supplied by the means by
which that director has asked to be sent or supplied with such notices
or documents for the time being.
46.4
A director may agree with the Company that notices or documents
sent to that director in a particular way are to be deemed to have been
received within a specified time of their being sent, and for the
specified time to be less than 48 hours.
46.5
Any Voting Member described in the register of members by an
address not within Great Britain, who shall from time to time give the
Company an address within England at which notices may be served
upon him, shall be entitled to have notices served upon him at such
address, or an address to which notices may be sent using electronic
communications, but, save as aforesaid and as provided by the Act,
only those Voting Members who are described in the register of
members by an address within England shall be entitled to receive
notices from the Company.
46.6
Any notice, if served by first class (or equivalent) post, shall be
deemed to have been served on the day following that on which the
letter containing the same is put into the post, and in proving such
service it shall be sufficient to prove that the letter containing the
notice was properly addressed and put into the post as a prepaid letter.
Any notice, if served by electronic communications, shall be deemed
to have been given at the expiration of 48 hours after the time it was
sent.
47.
No right to Inspect Accounts and Other Records
Except as provided by law or authorised by the Board or an ordinary
resolution of the Company, no person is entitled to inspect any of the
Company's accounting or other records or documents merely by
virtue of being a member.
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DIRECTORS' INDEMNITY AND INSURANCE
48.
Indemnity
Indemnity
48.1
Subject to Article 48.2, a relevant director of the Company or an
associated company may be indemnified out of the Company's assets
against:
The 2006 Act permits a company to offer a wide indemnity to directors
and for them to purchase insurance in this respect.
48.1.1
any liability incurred by that director in connection with any
negligence, default, breach of duty or breach of trust in relation to the
company or an associated company;
Article 48 (indemnity) allows the NGB to indemnify its directors and is
drafted very widely. You may feel that it is appropriate to make this
more limited.
48.1.2
any liability incurred by that director in connection with the activities
of the company or an associated company in its capacity as a trustee
of an occupational pension scheme (as defined in Section 235(6) of
the 2006 Act);
48.1.3
any other liability incurred by that director as an officer of the
Company or an associated company.
48.2
This Article does not authorise any indemnity which would be
prohibited or rendered void by any provision of the 2006 Act or by
any other provision of law.
48.3
In this Article:
48.3.1
companies are associated if one is a subsidiary of the other or both are
subsidiaries of the same body corporate, and
48.3.2
a relevant director means any director or former director of the
Company or an associated company.
49.
Insurance
49.1
The Board may decide to purchase and maintain insurance, at the
expense of the Company, for the benefit of any relevant director in
44
\FARDM1\2579252.3
respect of any relevant loss.
49.2
In this Article:
49.2.1
a relevant director means any director or former director of the
Company or an associated company;
49.2.2
a relevant loss means any loss or liability which has been or may be
incurred by a relevant director in connection with that director's duties
or powers in relation to the company, any associated company or any
pension fund or employees' share scheme of the company or
associated company; and
49.2.3
companies are associated if one is a subsidiary of the other or both are
subsidiaries of the same body corporate.
50.
[Rules
Rules
[Set out Rules to be reserved for the Voting Members, for example
setting out rights, privileges and obligations of the different
categories of member. If only the Voting Members may make,
amend and revoke any Rules at all, then the prompts in square
brackets can be deleted so that the Article reads "Only the Voting
Members in general meeting may from time to time make, vary and
revoke Rules".]
Although the Articles can only be amended by Special Resolution of the
members, the Rules may be made, varied and (i) revoked by the Board
or the Voting Members, as you decide and provide in the Articles.
50.1
Only the Voting Members in general meeting may from time to time
make, vary and revoke Rules:
50.1.1
[Insert];
50.1.2
[Insert].
50.2
The creation, variation and revocation of the Rules will only be
passed by a vote of [at least two-thirds][a simple majority] of the
45
The Articles provide options (at Articles 18 (directors' discretion to
make further rules) and 50 (rules)) for setting out either that the Board
shall have the power to make, vary and revoke the Rules subject to such
changes as may be reserved to the Voting Members or (ii) that certain
types of rules can only be made by the Voting Members.
\FARDM1\2579252.3
Voting Members present and voting at a general meeting.
50.3
Rules made pursuant to Article 50.1 must be compliant with the 2006
Act and these Articles in order to be valid.]
51.
Dissolution
Dissolution
If upon the winding up or dissolution of the Company there remains
after the satisfaction of all its debts and liabilities any property
whatsoever the same shall be paid to or distributed [among the Voting
Members of the Company in proportion to their contributions to such
property].
It is important for the Articles to set out what happens to any surplus
moneys on a winding-up. Article 51 (dissolution) is drafted to provide
for the distribution of any surplus funds to the Voting Members. You
may need to take legal/tax advice if you want to change your current
provisions particularly if you claim the VAT exemption or have mutual
trading status.
46
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Annexure 1
Form of Proxy Notices
Company No. [●]
[●] LIMITED
(the "[●]")
[insert name and address of Voting Member]
Before completing this form, please read the explanatory note below.
I/We being a Voting Member of [●] appoint the chair of the meeting or (see
note 3)
as my/our proxy to attend, speak and vote on my/our behalf at the [●annual]
[●special] general meeting of [●] to be held on [insert date] at [insert time]
and at any adjournment of the meeting.
I/We direct my/our proxy to vote on the following resolutions as I/we have
indicated by marking the appropriate box with an "X". If no indication is
given, my/our proxy will vote or abstain from voting at his or her discretion
and I/we authorise my/our proxy to vote (or abstain from voting) as he or she
thinks fit in relation to any other matter which is properly put before the
meeting.
47
\FARDM1\2579252.3
RESOLUTIONS
For
Against Abstain
[ORDINARY BUSINESS]
1. [ insert text of resolution ]
2. [insert text of resolution ]
[SPECIAL BUSINESS]
3. [insert text of resolution ]
4. [insert text of resolution ]
Signature
Date
Notes to the proxy form
1
As a Voting Member of [●] you are entitled to appoint another person
as your proxy to exercise all or any of your rights to attend and to
speak and vote at the meeting.
2
The appointment of a proxy will not prevent you from subsequently
attending and voting at the meeting in person. If you have appointed a
proxy and attend the meeting in person, your proxy appointment will
automatically be terminated.
3
A proxy does not need to be a member of [●] but must attend the
meeting to represent you. To appoint as your proxy a person other than
the chair of the meeting, insert their full name in the box. If you sign
and return this proxy form with no name inserted in the box, the chair
48
\FARDM1\2579252.3
of the meeting will be deemed to be your proxy. Where you appoint as
your proxy someone other than the chair of the meeting, you are
responsible for ensuring that they attend the meeting and are aware of
your voting intentions.
4
To direct your proxy how to vote on the resolutions mark the
appropriate box with an "X". If no voting indication is given, your
proxy will vote or abstain from voting at his or her discretion. Your
proxy will vote (or abstain from voting) as he or she thinks fit in
relation to any other matter which is put before the meeting.
5
To appoint a proxy using this form, the form must be:

completed and signed;

sent or delivered to [●] at [insert address]; and

received by [●] no later than [insert date and time].
6
In the case of a Voting Member which is a company, this proxy form
must be executed under its common seal or signed on its behalf by an
officer of the company or an attorney for the company.
7
Any power of attorney or any other authority under which this proxy
form is signed (or a duly certified copy of such power or authority)
must be included with the proxy form.
8
[■As an alternative to completing this hard-copy proxy form, you can
appoint a proxy electronically by [insert details]. For an electronic
proxy appointment to be valid, your appointment must be received by
[●] no later than [insert date and time].]
9
If you submit more than one valid proxy appointment, the appointment
received last before the latest time for the receipt of proxies will take
precedence.
10
You may not use any electronic address provided in this proxy form to
communicate with [●] for any purposes other than those expressly
stated.
11
To terminate a proxy instruction you will need to inform [●] using one
49
\FARDM1\2579252.3
of the following methods:
(a)
by sending a signed hard-copy notice clearly stating your
intention to terminate your proxy appointment to [insert
address]. In the case of a Voting Member which is a company,
the termination notice must be executed under its common
seal or signed on its behalf by an officer of the company or an
attorney for the company. Any power of attorney or any other
authority under which the revocation notice is signed (or a
duly certified copy of such power or authority) must be
included with the revocation notice.
(b)
by sending an e-mail to [e-mail address] [set out
authentication requirements].]
In either case, the revocation notice must be received by [●] no later
than [insert date and time not more than 48 hours before the meeting].
50
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Annexure 2
Form of Wording for Resolution
1.
IT WAS RESOLVED THAT the Company adopt as its Articles of
Association, the Articles attached hereto and initialled by the Chair
on every page.
[2.
IT WAS NOTED that:
2.1
the provisions of the Company's Memorandum as to its objects and
the distribution of assets were now set out in Articles [●] and [●]]
2.2
as the Chair had a casting vote at general meetings prior to 1 October
2007, the Chair was permitted to retain that casting vote as provided
for by Article [●]]
51
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