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Annual Report 2009

Resolution 6 It is proposed in Resolution 6 to adopt new Articles of Association (the “New Articles”) in order to update and replace the existing Articles of Association (the “Current Articles”) primarily to take account of changes in English company

law brought about by the Companies Act 2006, the final part of which came into force on 1 October 2009.

The principal changes introduced in the New Articles are summarised in these Explanatory Notes. Other changes,

which are of a minor, technical or clarifying nature and also some more minor changes which merely reflect changes made by the Companies Act 2006 have not been noted in these Explanatory Notes.

A copy of the Company’s proposed New Articles of Association will be available free of charge by written request to the Company’s registered office up until the date of the AGM. They will also be available for inspection on the Company’s website at the following URL: http://www.sunrisediamonds.com/aimrule.html.

6(a) The Company’s objects The provisions regulating the operations of the Company are currently set out in the Company’s memorandum and articles of association. The Company’s memorandum contains, among other things, the objects clause which sets out the scope of the activities the Company is authorised to undertake. This is drafted to give a wide scope.

The Companies Act 2006 significantly reduces the constitutional significance of a company’s memorandum of association. The Companies Act 2006 provides that a memorandum will record only the names of the original subscribers and the number of shares each subscriber has agreed to take in the company. Under the Companies Act 2006 the objects clause and all other provisions which are currently contained in a company’s memorandum, for

existing companies at 1 October 2009, will be deemed to be contained in a company’s articles of association unless

the company passes a special resolution to the contrary.

Further, the Companies Act 2006 states that, unless a company’s articles provide otherwise, a company’s objects are

unrestricted. This abolishes the need for companies to have objects clauses. The Company is proposing to remove its objects clause together with all other provisions of its memorandum which, by virtue of the Companies Act 2006,

are to be treated as forming part of the Company’s articles of association as of 1 October 2009 to allow it to have the widest possible scope for its activities. Resolution 6 confirms the removal of these provisions for the Company. As the effect of this resolution will be to remove the statement currently in the Company’s memorandum of association regarding limited liability, the New Articles also contain an express statement regarding the limited liability of shareholders.

6(b) Change of name Currently, a company can only change its name by special resolution. Under the Companies Act 2006 a company will

be able to change its name by other means provided for by its articles. To take advantage of this provision, the New

Articles enable the directors to pass a resolution to change the Company’s name.

6(c) Authorised share capital and unissued shares The Companies Act 2006 abolishes the requirement for a company to have an authorised share capital. The New Articles do not provide for an authorised share capital and so a consequence of resolution 6 would be the removal of this limitation from the Company’s constitution. Directors will still be limited as to the number of shares they can at any time allot because an allotment authority continues to be required under the Companies Act 2006, save in respect of employee share schemes. Resolutions 4 and 5 set out the limits that the members are being asked to approve in respect of allotment and issue of new shares at this years annual general meeting.

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