In this book, we have mostly depicted companies as legal actors in their own right that act through certain human agents. In this chapter, our focus changes: we now think of companies as things that may be owned and controlled. Nevertheless, the motivations of human agents remain at the forefront. Some of the law that we encountered in previous chapters will be relevant here, because it regulates the behaviour of the human protagonists; for example, the law on directors’ duties (see Chapters 10 to 13).

Companies have to act through their directors, officers or members and there need to be rules to govern how the internal processes of the company operate. These rules govern a wide range of issues including how shares will be allocated, the rights attaching to shares, the rights and responsibility of members and directors, and how meetings will be held. Historically, it was necessary for the persons setting up a company to adopt a Memorandum of Association and Articles of Association to deal with such issues. The Memorandum of Association contained basic information about the company such as; its name; the amount of its share capital; the number of shares issued; that the liability of members was limited; and the names, addresses, occupation and number of shares taken by each member. Sometimes it also contained an objects clause, which stated the purpose of the company.