Constitution and legal effects

In this lesson

1. 0:00 Articles of association and company constitution
2. 0:35 What goes into the articles of association
3. 1:30 How to amend articles and set borrowing limits
4. 2:31 Model articles as default rules
5. 3:07 Resolutions and constitutional agreements
6. 3:38 Objects clause and ultra vires explained
7. 5:17 Legal effects of the company constitution
8. 7:02 Hickman v Kent case and member enforcement
9. 8:03 Eli v Positive Life Assurance and third party limits
10. 10:03 Changing articles: special resolution requirements
11. 11:14 Entrenchment and unanimous consent rules

About this lesson

You'll learn what the articles of association cover—from director appointments and powers to shareholder rights and dividend procedures—and discover how companies can adopt model articles or create custom rules to suit their needs. The lesson also explains the concept of ultra vires (acting beyond authorised powers), the legal effects of constitutional documents, and the strict requirements for amending company rules, including how entrenchment can make articles harder to change but never impossible to alter with unanimous consent. This content is essential for the Corporate and Business Law (LW) paper, where understanding company constitutions and their enforceability is a core requirement. You'll see practical examples—such as how shareholders can protect themselves through objects clauses or how courts protect minority shareholders from majority abuse—that illustrate why these rules matter in real business situations. By the end, you'll grasp how the constitution functions as a three-way contract binding the company, its members, and members to each other, and recognise the important distinction between what members can enforce and what third parties cannot.

Duration: 12m