Summary
Summary Business Law and Practice - Entering into a Contract
- Module
- Business Law And Practice
- Institution
- University Of Law (ULaw)
Business Law and Practice - Entering into a Contract
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Entering into a Contract(WS3)
Understand the facts:
Who is the Company?
When was the Company formed?
What is the Articles of Association? Formed under 2006 or 1985 CA? Unamended
or Amended Articles of Association? Are there are Special Articles? What do the
Special Articles say?
What are they planning to?
Statutory books – confirmation of company name, company number, registered
address. How many shareholders and directors are there and how many shares do
they hold? E.g. There are 2 directors and 3 shareholders (each holding 1,000 shares
– ordinary £1 share)
How many shares in existence? E.g. 3,000 – 1,000 to each 3 members
Example - buying new office furniture / stationary– entering into a new contract.
Article 3 MA states that the directors are responsible for the management of the
company and can exercise all the company’s powers.
There is a similar provision in art 70 of Table A.
5. Enter Board of Board resolution Companies Act 2006 is silent on who can - S248(2) and
contract directors contract on the company’s behalf. MA 15 =
minutes of
Model Article 3 - Directors general director’s
management power - Subject to the articles, meetings
the directors are responsible for the must be kept
management of the company’s business, for for 10 years
which purpose they may exercise all the
powers of the company
Procedure Plan
BM - The board will resolve to:
1. Approve and enter into the contract; and
2. Authorise execution.
When a company is entering into contracts,
the board resolutions are going to be more
involved. e.g. the contract will be negotiated,
it will be set out in writing and it will need to
be signed.
There will be 3 separate board resolutions:
1 – board resolution to agree the draft terms
of the contract.
2 – board resolution to enter into the
contract.
3 – board resolution to authorise any director
to sign / executer the contract on the
company’s behalf.
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