Property Management Companies – Companies Limited by Guarantee
Is your Company’s Constitution Obsolete?
If your Company has not adopted a new Constitution (previously Memorandum & Articles of Association) bringing it into line with the Companies Act 2014 (the “Act”) you should consider doing so for the following reasons;
- Your constitution will not reflect your current name which may cause confusion/delays with financial institutions, new tenants/owners, and suppliers;
- While the existing Memorandum & Articles of Association of a Company Limited by Guarantee (CLG”) continues in force following the end of the transition period any provisions that conflict with the mandatory provisions of the Act will no longer apply. This means that there will be uncertainty regarding which articles continue to apply;
- Confusion may arise as to what directors have the authority to do as there may be references that no longer apply or have been amended within the Act;
- Companies may not be able to avail of the flexibilities included within the CA2014 if their existing Articles specifically provide otherwise (for example the use of electronic means to serve notice);
- Members have a right to request a copy of the Company’s constitution at any time, failure to update the constitution could lead to confusion and uncertainty; and
- Updating your Company’s Constitution will also provide an opportunity to incorporate applicable provisions of the Multi-Unit Development Act (“MUD Act”). Failure to do so can lead to inconsistencies between a Company’s Constitution and the requirements under the MUD Act.