ExpertEasy1 markMultiple Choice
The formation and constitution of business organisationsSection ASyllabus DCorporate and Business Law
ACCA · Question 35 · The formation and constitution of business organisations
If a newly formed private limited company does not register its own bespoke Articles of Association, what happens?
If a newly formed private limited company does not register its own bespoke Articles of Association, what happens?
Answer options:
A.
The company's incorporation will be rejected by Companies House.
B.
The Model Articles for private companies will automatically apply by default.
C.
The directors must operate under common law rules until articles are drafted.
D.
The company will be treated as a general partnership.
How to approach this question
Recall the purpose of the Model Articles provided by the government.
Full Answer
B.The Model Articles for private companies will automatically apply by default.✓ Correct
Under the Companies Act 2006, if a company does not register its own Articles of Association, or if the registered articles do not exclude or modify the relevant Model Articles, the Model Articles prescribed for that type of company will automatically apply by default.
Common mistakes
Believing that bespoke articles are a mandatory requirement for incorporation.
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