Partnerships in groups are not body corporates

This blog is a bit dry, but like a desert where the camel milk is sweeter.
            On the 10 October 2006, Corporate Blawg contemplated the Company Law Reform Bill.  Big questions were posed and hard answers imposed for how the law would change in relation to written resolutions (or not-change-much as it happens; nor-change-very-soon as it happens slowly). 
            Does he - Corporate Blawg who stumbles through this tangly brush of linguistical melody - go down the s.381A route (where Directors must "know" of the written resolution - when would they not?) and inform their auditors, or does he trip the light fandango down to Article 53 of the Table A, which is a bit less secure but a hell of a lot easier. Corporate Blawg usually checks the Art.s, and heads straight for Road 53.  Anyway, this is old turf now...
           In Corporate Blawg's great road-trip of corporate legal discovery, Corporate Blawg has recently discovered another such dilemma to add intrigue and expertise to his drafting.  Like a bullet from the blue, or a bolt from the green, Corporate Blawg learnt of a key decision to make when drafting commercial contracts.  This gemstone of wisdom is that where a group of companies contains an entity that is not a corporation or body corporate... such as.... a partnership... (gasp)... the typical definition of group, following s.736 of the Companies Act 1985, will not apply! (Eek).  Therefore if you use the s.736 definition and have a partnership or unincorporated association somewhere in the middle of the group, then it may split the group in two - ouch - (a bang on the head with swinging beam).  One thing to be wary of is that this may have implications on your "change of control" provisions in the contract, so DUCK! (as the beam swings back at you again) (is this like panto-law?).
           The alternative to this quasi-disaster (is behind you) is to look back into s.258 which may describe groups in terms of "undertakings".  The partner of s.258, namely s.259, states that undertakings may be body corporates or partnerships. [Cheer].
           The key difference, to be savy to in your meaty £500-per-page contract, is that a group without partnerships or unincorporated associations will describe itself in the contract as a group consisting of "subsidiaries" and "holding companies", whereas a group with such non body-corporates will describe itself as consisting of "subsidiary undertakings" and "parent undertakings". The End.
           So close, yet, so far.

Comments

[Peter]

Hello Corporate Blawger - it took me a minute or two to recognise your image and distinctive prose style, but it's been good to see you up and running and interesting to read your take on the impending changes to company law. I'll keep eyes peeled to see what you post in the future.

All the best ...