Entrenched Articles of Association are utilized when companies and their shareholders require enhanced protection for fundamental aspects of corporate governance. They are particularly relevant when establishing long-term control structures or protecting minority shareholder rights under English and Welsh law. The entrenchment provisions, governed by sections 22-23 of the Companies Act 2006, can only be modified through specific procedures or conditions, providing additional security for key corporate arrangements. This document type is especially valuable for joint ventures, family businesses, and companies with complex shareholder arrangements.
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Key Requirements PROMPT example:
Entrenched Articles Of Association
"I need Entrenched Articles of Association for a new technology startup with three founding shareholders, where we want to ensure certain key provisions about share transfers and board composition cannot be changed without 100% shareholder approval."
1. Interpretation: Definitions and rules of interpretation for terms used throughout the Articles
2. Share Capital: Details of share classes, rights, and transfer provisions including authorized capital and share structure
3. Directors: Powers, duties, appointment, and removal procedures for company directors
4. Decision-Making by Directors: Procedures for board meetings, resolutions, and handling conflicts of interest
5. Members: Rights, obligations, and decision-making processes for company members/shareholders
6. General Meetings: Procedures for calling and conducting general meetings, including voting rights and quorum requirements
7. Administrative Arrangements: Company communications, records, seal usage, and other administrative matters
1. Share Premium Account: Provisions for handling share premium accounts and related matters when shares are issued at premium
2. Class Rights: Detailed provisions regarding different share classes and their associated rights and restrictions
3. Tag-Along Rights: Protective provisions for minority shareholders in case of sale by majority shareholders
1. Schedule 1: Matters Reserved for Shareholder Approval: Comprehensive list of decisions and actions requiring specific shareholder approval
2. Schedule 2: Share Transfer Procedures: Detailed procedures and requirements for transferring shares between parties
3. Schedule 3: Entrenchment Provisions: List of specifically entrenched provisions and the special procedures required for their modification
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