Ring-Fenced Companies and the Doctrine of Constructive Notice

A ring-fenced company is a company whose MOI contains special conditions or prohibitions that prohibit the amendment of any particular provision of the MOI.

Section 15(2)(b) and (c) allows a company’s powers to be restricted by informing the public that a company’s powers are either limited or restricted where a company’s name is followed by the expression “RF”, an acronym for ring-fenced.

Section 11(3)(b) states that in the event of a company’s MOI including any provision ito section 15(2)(b) and (c), restricting or prohibiting the amendment of any provision of the company’s MOI, the company name must be followed by the expression “RF”.

Section 13(3) states that in the event of a company’s MOI including any provision ito section 15(2)(b) and (c), the Notice of Incorporation is required to stipulate all such prohibitions and restrictions and the said prohibition and restriction locations in the MOI.

Any person, including third parties, are deemed to have knowledge of a company’s restrictions and limitations once the company’s MOI states that the company is a “RF” company and the said persons and third parties are unable to raise a defence that they were unaware of certain restrictions or limitations of the company in their dealings with the said company. Since the MOI is a public document, the common-law doctrine of constructive notice then applies in this instance.

Special conditions are not defined in the 2008 Companies Act but it includes any restriction placed on the capacity of the company or the authority of its agents.

The 2008 Companies Act abolished the concept of the doctrine of constructive notice and any person and third parties in their dealings with a company is not deemed to have constructive knowledge of a company’s public document. However, ring-fenced companies are the exception.  In the event where a company’s Notice of Incorporation draws attention to the existence of a special condition in the MOI and the company’s name includes the suffix “RF”, any person and third parties will be deemed regarded as having received notice and having knowledge of the special condition.