Two important changes of substance are part of the new arrangements.
Formerly all companies had to state a maximum limit on the amount of shares they can issue – “authorised” or “nominal” capital – in their Memorandum of Association. The 2006 Act removes that requirement as no such figure is required in the articles of companies. However, PLC’s will still have to meet the minimum capital requirement of having £50,000 of issued share capital with at least 25% paid up.
Under the 2006 Act companies will not be required to state what their objects are – this is currently required in the memorandum. The new rule is that:
“unless a company’s articles specifically restrict the objects of the company, its objects are unrestricted” – section 31(1). We come back to this “death of ultra vires” in the Company Contracts topic later this term.