Constitution

Key notes on company constitution

1. A contract legally binding between members and members, between members to company and company to members;

2. To governing the internal management and operations of the company;

3. Is a business document that, be construed so as to give it reasonable business efficacy;

4. Constitution supplements to the Act, therefore it is not compulsory to have;

5. Any clause in constitution that contravenes the Act would be void;

6. Adoption of a constitution needs a special resolution i.e. at least 75% of the members approve it;

7. A common seal, if required to have, the use must be govern by company constitution;

8. Different classes of shares, if required, the information need to state clearly and display prominently in the constitution;

9. Can use constitution to impose additional rules governing the transfer of shares as well as refusal in the registration of shares <S42(2) read with S106(1)(a)>

10. Issuance of preference shares required constitution