ARTICLES OF ASSOCIATION 
2T 
The danger of hybrid articles, ¢.e. Table A with modifications, 
is well illustrated by the cases of Fisher v. Black & White 
Publishing Company (1901, I Ch. 174), and R. Paterson 
and Sons v. Paterson (1916, W.N. 352). 
[t may be found useful to notice some of the chief points 
vhich require special attention in preparing the articles of 
association. 
The articles should provide for the purchase by the com- 
pany of the business it is formed to acquire, whether by 
entering into an agreement already prepared but not exe- 
cuted, or by adopting an agreement already made between 
the vendors and certain persons as trustees for the proposed 
company. If any of the vendors are also directors, it. is 
usual and advisable to insert a provision for their protection; 
but the protection will not be effective unless it covers the 
facts of the particular case and the extent of the protection 
ls open to some doubt. [See Ommium Electric Palaces v. 
Baines (1914) 1 Ch. 332 per Sargant J. at p. 347.1 
Provision should be made for the payment of commissions 
for underwriting. 
A limit should as a rule be placed on the borrowing powers of 
the company, e.g. that the amount borrowed must not exceed 
the amount of the nominal capital, except with the sanction 
of a general meeting. This limit is essential in the case 
of a company requiring a quotation on the Stock Exchange 
and is usual except in the case of private companies. 
The length of notice required for a general meeting, the 
quorum, and the conditions under which a poll may be 
demanded, should be specified; and in framing these articles 
the provisions of s. 117 (see infra p. 126) as to the length of 
notice required for a special resolution must be borne in 
mind. The voting powers of members, whether on a sliding 
scale or otherwise, must be carefully arranged, so as to prevent 
the control of the company falling into the wrong hands. 
Provision should be made as to voting by proxy. 
It is convenient to provide for class meetings of share- 
holders, giving power for a special majority of a class to bind 
the class, so that variations may, if necessary, be made in 
the respective rights of the different classes. 
Full provisions as to the number, appointment, qualifica- 
tion, remuneration, disqualification, retirement, and removal 
of directors should be made, and, if necessary, regulations 
as to the appointment, etc., of one or more managing directors, 
or of alternate directors. Where a director is to be appointed 
by a general meeting, it should be provided that due notice 
Contents of 
Articles.