Constitutional documents
In relation to
Companies
By convention, most
- the Articles of Incorporation) is the primary document, and will generally regulate the company's activities with the outside world, such as the company's objects and powers.
- the by-laws) is the secondary document, and will generally regulate the company's internal affairs and management, such as procedures for board meetings, dividend entitlements etc.[2]
In many countries, only the primary document is filed, and the secondary document remains private. In other countries, both documents are filed.
In civil law jurisdictions, the company's constitution is normally consolidated into a single document, often called the charter.
It is quite common for members of a company to supplement the corporate constitution with additional arrangements, such as shareholders' agreements, whereby they agree to exercise their membership rights in a certain way. Conceptually a shareholders' agreement fulfills many of the same functions as the corporate constitution, but because it is a contract, it will not normally bind new members of the company unless they accede to it somehow.[3] One benefit of shareholders' agreement is that they will usually be confidential, as most jurisdictions do not require shareholders' agreements to be publicly filed.
Another common method of supplementing the corporate constitution is by means of
Partnerships
Partnerships also have constitutional documents in the form of a
Trusts
A
Unincorporated associations
An unincorporated association may also have a constitution which provides for the rights and remedies of the members as between themselves, and governs the conduct of the association. Because, in most legal systems, unincorporated associations do not have separate legal personality, this aspect of the constitutional documents is not applicable. In most legal systems unincorporated associations are not required to have formal written constitutions, but many of the larger and more complex organisations would be almost impossible to administer without one.[6]
Notes
- ^ Although, for example, in Australia, a company has a single consolidated corporate constitution.
- ^ In the event of any inconsistency, the Memorandum usually prevails, see Ashbury v Watson (1885) 30 Ch D 376
- ^ Shalfoon v Cheddar Valley [1924] NZLR 561
- magic circle law firm, Slaughter and May.
- ^ Although some jurisdictions require one in specific instances, for example, where the trust property include land.
- ^ For example, many trade unions and political parties have many millions of members, and would be almost impossible to run without clear internal regulations. Chlora is super! :)