Thomas Dalton thomas.dalton at  said:

>> Second, are we happy that the directors should be able to create a new class
>> of members. The alternative, I guess, is to put this power in the hands of
>> the membership.

> The other part I'm not happy with is that the rights of a class of
> membership can be changed at a general meeting of just that class,
> meaning they can choose to give themselves more votes than everyone
> else and no-one else gets a say in the matter. I think I may be
> misunderstanding the whole thing...

I'm also not clear how the rules would work on this. Say you had two classes -
Class A and Class B and initially both had equal votes. Art 3.2 refers
to "directly or indirectly" altering the rights of a class. If you had a
resolution that said all Class B members had 1000 votes each, you could say
that the rights of Class A members had been indirectly varied. Art 3.3 says
rights can only be varied by a resolution of the class - would that cover
indirect variations like this? My experience of similar clauses in the
commercial context is that it probably would - although those are normally
much more clearly worded.

> Remember, giving powers to the directors doesn't mean the membership
> can't do anything about it - a general meeting can pass an ordinary
> resolution creating a rule (under article 28.4) saying the board has
> to put everyone in the "general members" class (or whatever you call
> it) unless they have the permission of that member. (I assume the
> board can't change a rule added by a general meeting, although that
> isn't explicit... it's probably in the Companies Act somewhere.)

You could read it that the Board could create a rule that said "A",
the general meeting could revise it to "B" and then the Board the next
week could change it back to "A". As you said this would be crazy, but there
is nothing in the Articles that explicitly says they couldn't. I can't
think of anything in the Companies Act that would prevent it either.

On the other hand, the members could pass a Special Resolution which restricted#
the powers of the Directors (under Art 15.1) but this would need 75% majority.
The directors wouldn't be able to over-ride this.