The articles of association of a private company provided that table A of the first schedule of the Companies (Consolidation) Act 1908 should apply ‘only so far as they are not excluded, altered, or modified by the following provisions.’ Article 12 provided that ‘after allowing for all charges, including the payment of directors’ salaries, the profits of the company shall be applied’ in a particular way among the shareholders.
Held that article 12 was not consistent with clause 99 of table A, which provides for the directors setting aside out of profits sums to a reserve fund, and consequently that the directors had not power to do so.
Judges:
Earl Loreburn, Viscount Haldane, Lord Kinnear, Lord Shaw, and Lord Parmoor
Citations:
[1916] UKHL 19, 54 SLR 19
Links:
Jurisdiction:
Scotland
Company
Updated: 14 July 2022; Ref: scu.630691