United Kingdom: ME Association governance issues

I think it's important not to lose sight of the main issue here: that the payments to trustees were not allowed according to the Articles of Association in public and official use at the time.
(Wheter those Articles of Association were the "real" ones is a defense and secondary issue.)

• The trustees of the ME Association paid eachother for services for nearly 70,000 pounds + payment for Richard Osman out of ME Association coffers.

• According to the Articles of Association in use at the time of payment, this was not possible (Article 4) - unless it was shown that there was somehow an exceptional situation that justified hiring these trustees, and written permission was given by the Charity Commission, the UK gov's charity regulator (Article 28, section (c).
  • These Articles of Association were registered as the ME Association's governing document at the Companies House. They were signed by the ME Association, declaring they were "a true copy" of the document approved by the Association members as the new Articles of Association. (I expect a copy is also in the possession of the Charity Commission.)
  • These Articles of Association were up on the ME Association's own website at the time the payments took place as the current governing document. The name of the PDF & link holding them was Association-of-ME-Association-11.03.2014.pdf, and these were up until just now.
  • These governing documents were in active use for a decade. This is not something you put in a drawer like a transfer deed or your college diploma - normally, these would have been regularly consulted because they are a pre-chewed map of everything for ME Association issues. And for the decade they were in use, no board director ever said: "Hang on, these are not right".

Under scrutiny for the payments they made, the ME Association responded several times: so far it appears to me that these responses didn't match eachother or the documentation. They are now going all-in on the claim that the current Articles of Association are not the signed document registered at the Companies House and its twin up on their own website as the current Articles of Association, but this new, 2013-named text that matches the old 2013 version of the Articles of Association that was amended in 2014.

It is up to them to prove that this is so. So far I have not seen convincing material that indicates their claim is true, so I'm curious how they're going to convince official institutions like the Chartity Commission and the Companies House. (They can't just send an undated text w/o proof it was approved by the members and go: "So, hey, we're being questioned on large payments to eachother, but this random doc says that we totally could, please make it our new official governing doc.")

I think their own sloppyness regarding official business could be harming them now. Following your governing doc and dated, public, documents on what you've been doing is making you accountable, which is not just great for members, but also protects the trustees with a clear paper trail.

At the moment their only clearly documented documents are those at Companies House (dated, signed, registered etc.). If the trustees want to convincingly make the claim that the official, decades-used Articles of Association -in use at the time of payments- were actually NOT the Articles of Association, then I wonder if the written approval they should have gotten in 2013 and 2014 from the Charity Commission to change Articles 4 and 28 might be key for them to prove it. (But if they did prove it, ten there's still a discussion to be had if the Articles of Association in use on their website and officially registered to consult on were not at the time legally those that should have been adhered to, and a question why they didn't consult those when making their choices.)

 

I personally do the sleuthing and puzzling on how the claims of the ME Association on the AoA's match the records because I'm me (I can't resist digging through documentation when I'm curious about what actually happened), and because the bombastic statement with the legal threats didn't match what is on record. I just wanted to know what did happen.

But it is a secondary issue. And don't forget it's the trustees who want to make it debateable wheter the Articles of Association were the "real" ones.

I don't think the trustees were nefariously siphoning off money. And the services delivered were probably fine.
But with what's on the table at the moment I do suspect that the trustees and their chair have been sloppy and confidently following their own assumptions (or a defunct document) when making these payments, and are now trying to create a situation where they were not wrong.

And if that's the case it would be dumb, because then with the legal threats, mismatching defense and odd claims, on top of what was already playing with other occasions, they are losing goodwill of members if it all falls apart.
Personally I can sympathise with the awfulness of discovering you made such a mistake, but not with the papering-over, especially the way it is done so far.

If they are right -which I myself doubt at the moment as I've seen no good proof that they are, only discrepancies- then they still could and should have handled it much better. Because the questions by Peter White would still be understandable and valid.

 

That's what I had assumed based on a quick comparison between AoA07 and AoA13 and the declaration and special resolution text accompanying the AoA13 registration at Companies House.

But this report puzzles me - it indicates that members only voted on those two Articles, not the whole governing document.

Edited to add: link to post with screenshot.

 

Because I think that the November 2014 document was intended as the replacement for the 2013 Articles but that they screwed up on Clause 28 by failing to carry forward what had already been adopted for the 2013 Articles.

I think the text that we see for clause 28 may be the default text from the model Articles template. I think the explanation that the wrong document was sent to Companies House and the correct document is the document he has now since been uploaded to the site (which has a 2013 date on it) may be confabulation and in their haste to present a different document to that which was registered with Companies House as the "correct" and intended document, they have overlooked the rest of the content.

 

It seems that articles filed at CH are not necessarily the 'legal' ones, but if the same articles were posted on the MEA website and no documentation exists to confirm the existence of another that this has to be the default assumption.

 

Not sure if it has been mentioned but there is a specific 15-day legal notification requirement for amendments - s26 of the Companies Act:

 

I don't see any reason to assume that - so far I've seen no indication that section (a) of the 2013 AoA was not scrapped on purpose.
Additionally, the former section (b) became the new section (a) (No copy-paste mishap). Also, Article 4 was changed to match.

It looks like a normal Article evolution to me. (The Charity Commission might hold the answer of course, as their approval was needed.)

 

Yes, the summary of the November 2013 EGM does imply that the only resolutions voted on were the two numbered clauses (given as 24 and 29). The summary does not mention the votes for the adoption of the new model Articles.

However, the resolutions sheet that was submitted with the 2013 Articles does mention the proposal to adopt the major part of the new model form. Whether this part of the proposal was overlooked in the Resolution ballot slips, or was voted on and overlooked by whoever wrote up the summary, I have no idea, but it is a discrepancy.

If you look at the wording of the resolution for the 2014 Articles it could read as though they were putting the resolution for adopting the new [model] form out again. Possibly this is why there are no other changes listed as having been put out to membership ballot for the 2014 version - but I don't know as we don't have copies of the ballot notice or the magazine or a summary report for the 2014 resolution(s).

 

Thanks! I missed that article, interesting read. (Thanks for posting @Dx Revision Watch , sorry I missed it.)

And indeed.

It would have been a different situation for me if the AoA 2014 doc up at the ME Association website had been in content the same as the 2013-named doc that is now claimed as the "real" AoA.

And it's not just the mere registration, but the fact that at Companies House there is a dated and signed declaration by the ME Association that the attached document is "a true copy" of what was voted on and approved.

 

I can see that is a possible reading of things. But it fails to explain why the 2014 was motivated, since the other changes do not seem to be substantive and the change to clause 4 seems if anything to fit the change to clause 28. I am also unclear just how you can re-introduce a bit of standard text when making precise updates to a more detailed text already developed in house.

Perhaps the key question is whether or not any 'real' 'new' Articles exist anywhere in any form beyond the versions at CH, hidden away in files at MEA but not on the website and not otherwise seen by anyone. From your interpretation above it seems likely not.

In which case we are not dealing with filing of 'the wrong' documents but correct filing of a document that was, apparently, never intended to exist but was approved by the Trustees.

 

Thanks for posting this Nightsong.

I was aware of the 15-day notification period. It is mentioned in the law firm's article which I linked to upthread:

https://www.qualitycompanyformations.co.uk/blog/how-to-amend-a-companys-articles-of-association/

 

I have written again to Companies House this morning.

"I do have some additional questions but in the meantime, can I ask you to clarify that the date you have given in your email below for the last Articles of Association for this company should have been 04/12/2014 and not 04/12/2024?"​

Note there are three dates associated with resolutions for adoption of new Articles:

The date the resolution(s) were passed. That date becomes the date from which the Articles become legally effective.
The date on which the Articles are stamped as received by Companies House.
The date on the Filing History.

The 18 November 2014 Articles are dated 04 Dec 2014 in the Filing History and there are no new entries after 25 Oct 2024.

 

I see no reason to believe the author of the summary overlooked it if they had voted on a whole resolution: there is no further proof of this, plus the author repeatedly states that these two clauses were the "changes" to the AoA that were voted on.

I find this report disturbing, as it means that what could have happened is that the directors wrote a new AoA, and instead of being clear on that and telling members that they should scrutinise the whole, new, governing document for approval, as it was in their hands, the directors presented the situation as "The ME Association is adopting the AoA model of the Companies Act 2006, and we'd like a vote on these two Amendmends to it*." If you look at the resolution text, this may have been the case.

(Thing is, I hate to say it, but with the impression I have of how the old guard trustees are running things, I wouldn't put it past them. I think they're sloppy on these things and not particularly interested in healthy membership involvement.)

Not saying that is what happened, but now we have another discrepancy added to the jumble.



* edited to add - if you look at the report text, it could even have happened that these amendments were presented as "the" changes to the existing Articles of Association!

 

Whoa, I missed that in your first post. Must be. (But if not..... it would be another gobsmacking twist in this saga.)

 

There are no entries in the Filing History beyond this October 2024 resignation:

https://find-and-update.company-information.service.gov.uk/company/02361986/filing-history?page=1

25 Oct 2024 Termination of appointment of Georgina Evans as a director on 20 October 2024 View PDF


so I am pretty confident that no amendments to Articles have been registered since the registration of the 18 November 2014 Articles. But for the paper trail, I need CH to confirm that is was a typo before I submit further questions.

 

Same. Also not after October because for amendments to Articles the members should have had to vote about it and afaik it wasn't on the agenda for the last AGM, no?

 

Absolutely @bobbler well put.

 

No, it wasn't on the last AGM agenda and there have been no general meetings (previously known as "EGMs") called for changes to the Articles. And yes, proposals for changes would have required a special resolution.

I'd be interested to hear Riley's comments to the 15-day notification rule for amendments.

Remarkable that none of them had apparently noticed in 10 years that the Articles they signed off on and submitted for registration was "the wrong document". Has no-one looked at it since? I hesitate to use the word "clusterfuck" on S4ME but that's what it is and the more Riley says the deeper the hole he is digging for himself and his fellow trustees/directors.

Well, yes we messed up with the document 10 years ago but not to worry, we'll just toss this registered version out the window and look, we've found another document that suits us better - we'll call it the real Articles.

His insouciance is astonishing. Lawyer, too.