This constitution intended for use by a company with a simple shareholding structure and only one class of shares.
The Companies Act 1993 provides that a company can only take certain actions or avoid certain procedures if its constitution allows it to. For example, a company can only do the following things if expressly permitted by its constitution:
- buy back its own shares
- issue shares to new shareholders without first offering those shares to existing shareholders
- indemnify its directors.
This constitution is intended to be permissive and to allow companies to avoid having to obtain shareholder consent wherever possible.
This constitution is based on the principle that majority rules and that directors can take action without shareholder approval wherever possible. This approach will not always be appropriate. If the company would like shareholders to approve certain actions of the company, you will need different provisions in the constitution.