Memorandum and Articles not updated at Companies House.

[Drinkwater2]

Hi All,

I'm a member of a golf club that is a limited company. According to Companies House the Mems & Arts were updated in 1974, 2003, 2018 and 2019. A resolution was passed at the AGM in 1994 that was supposed to take effect in 1995. There is no mention of this amendment to the Articles in lodged in 2003 but then it appears in the updated articles in 2018 and 2019. I believe a limited company has 15 days to inform Companies House of any amendments to its Articles? I'd be grateful if anyone can throw any light on the implications of this?

Many thanks,

John

 

[WaveJumper]

15 days has always been my understating

Quick update check here:
https://www.gov.uk/make-changes-to-your-limited-company/constitution-and-articles-of-association

 

[Drinkwater2]

Thanks WaveJumper. Yes, that re-states the 15 day dead-line. Does anyone know if non-compliance renders the resolution/amendment void?

 

[WaveJumper]

There's a paragraph here on the subject:
https://gateleyplc.com/insight/quick-reads/when-do-changes-to-a-companys-articles-take-effect/

"Amendments to articles will generally require the consent of at least 75% of the members by special resolution. Once the articles have been amended, a copy of the new version must be filed at Companies House within 15 days. But when does the change take effect: is it when the resolution is passed? Or not until the articles are filed? According to a recent case it’s the date of the resolution that’s key. Once the members have resolved on an amendment by special resolution, the amended articles become the new contract and the new articles take effect. Their status as articles does not depend on registration. Failure to comply with the registration requirement means that both the company and its officers in default are guilty of a criminal offence and liable to a fine. But that failure does not affect the status of the articles resolved upon by the members"

 

[Drinkwater2]

Useful thanks. What I can't understand is that: -
There was no updating of the Articles in 1994 at Companies House. When they were updated in 2003 there is no mention of the amendment, then in the 2018 update it magically appears?

 

[WaveJumper]

Personally I always keep a check on anything we do with Companies House and HMRC for that matter just in case.

At the end of the day it sounds like your updates must have gone through and at least CH have not been chasing over the years to issue a fine.

 

[Drinkwater2]

The Articles don't state when any amendments or resolutions were passed so I don't think Companies House are any the wiser whether they are lodged in time. I guess that would require an eagle-eyed whistleblower to shop the directors?

 

[WaveJumper]

Has someone upset you on the fairway

 

[Drinkwater2]

No need, I can do that to myself! My issue is there's a load of old people who joined before 1995 who get free golf for life when they've been a member for 25 years and reached the age of 65. As waiting lists for golf courses disappeared it became obvious that this wasn't sustainable so the resolution was passed (in 1994) that anyone who joined in 1995 and beyond would only get a concessionary discount when they had been a member 25 years and reached the age of 65. It is now decided that the discount is 20% of your subs. It doesn't seem fair that the "old guard" get free golf and anyone after them only gets a couple of hundred quid off. Just trying to rock their boat!

 

[WaveJumper]

Good luck with that then

 

[The Resolver]

Would there be members who joined after 1994 and who were informed/read (club Rules?) believed that once they qualified (25 years/65yrs) they would enjoiy free membership thereafter ?

If so, then such members may consider sharing the cost of an hour or so with a solicitor specialising in club companies, as to a possible claim. Whilst , as WaveJumper said, non-registration of the Articles does not affect their validity,if they were misinformed in some way WHEN THEY JOINED and their understanding not corrected as to the change then they may have a contractual right to free membership when they qualify. On the other hand those who voted for the changes in 2018/19 (75% would have had to to pass the changes) effectvely agreed , whether they read and appreciated or not.

 

[Drinkwater2]

Hi Resolver and thanks.
The vote to discontinue completely free golf was passed on the 18th November 1994. Anyone joining after 1st April 1995 would only get discounted golf. I have to confess when I joined 15 years ago, I can't recall if it was mentioned that I would only get a discount when I qualified or not. We have an "old guard" who seem hell bent on protecting their free golf. Because it is a contentious issue there is a letter on the Club website that says....
"In 2012, and at considerable cost, advice from a London Barrister was sought whether the 1974 and 1978 resolutions could be changed. Counsel's opinion was that the Senior Life Resolutions could be challenged but would require a 90% majority of the qualifying group (those members who joined the Club before 1st April 1995 ) in agreement. The prospect of achieving this was doubtful, and taking into consideration the additional legal costs involved, it was decided not to pursue this further."
Can it be right that the only people who can vote are the people who qualify and that it requires 90% of them to say scrap it? Turkeys, given the choice, would probably say Christmas was a bad idea. In the M & A's all it says is that votes require a majority and in the event of a tie the Chair has 2 votes. It doesn't anything about 90% and only people who were members before a certain date can vote. I wonder what question was asked of Counsel? Was it "the Club's getting into financial difficulty, is there anyway we can reverse the free golf vote" or "how the hell do we protect our free golf in the face of growing unrest?"

 

[The Resolver]

As a member request a copy of Counsel's Advice . It was obtained on your behalf.

 

[eteb3]

Purely out of interest (and I'm very interested in this sort of thing), I'd love to know what counsel's advice says when you get a copy.

Can it be right that the only people who can vote are the people who qualify and that it requires 90% of them to say scrap it?

As they have a contract for life membership, then without something else, there is indeed no way Christmas can come unless the turkeys vote for it (ie, you can't remove someone's contractual rights without their agreement).

That introduces a puzzle as to why 90pc: afaik Companies Act requires 75pc for variation of class rights, and an unincorporated association would need 100% (and sometimes a club incorporated as a company behaves like an unincorporated one). Unless it's somewhere in the club's own rules, I can't see where 90pc is coming from - so if you find out, please let us know!

 

[prophet01]

@The Resolver

As a member request a copy of Counsel's Advice . It was obtained on your behalf.

Playing Devil's advocate, what if they simply refuse?

 

[The Resolver]

Raise that refusal with the members at large. Perhaps a number of you might share the cost of an application to court . I can;t see they would refuse and risk neing ordered by court to disclose.