In
company law practice this describes provisions in a company’s articles of association that conflict with mandatory requirements set by statute. It is a descriptive expression, not a defined statutory term. Where legislation lays down non‑derogable rules, the statute prevails and the offending article is void or of no effect to the extent of the inconsistency, unless the legislation expressly permits modification (for example, by special resolution or through specified disapplication procedures).
Across England and Wales, Scotland and Northern Ireland, the Companies Act 2006 operates on this basis; usage and effect are broadly consistent. In Ireland, the Companies Act 2014 applies the same principle to a company’s constitution.
Typical issues include attempts to: prevent members exercising statutory rights (such as removing a director by ordinary resolution), change statutory notice or meeting requirements without the level of consent the Act requires, or fetter statutory remedies or filings. Entrenchment provisions cannot override mandatory statutory provisions.
Practical significance: when drafting or reviewing articles/constitutions, ensure variations are made only in ways the relevant Act permits; when advising on governance or disputes, treat conflicting provisions as ineffective and apply the statutory rule.