The articles of association is a document that governs how a company is run. Containing a multitude of provisions, each of which is known as an ‘article’, this document serves as a ‘rule book’ that all company officers (directors and secretaries) and company members (shareholders or guarantors) must observe. Along with the memorandum of association, the articles forms the constitution of a UK limited company.
The memorandum of association is a document created by Companies House during the incorporation process. The memorandum and articles of association are the two of the principal company formation documents. Companies can choose to adopt ‘Model’ articles of association prescribed by the Companies Act 2006, or they can draft their own articles, provided all provisions are in accordance with UK company law.
‘Model’ articles of association are the standard default articles used by most companies in the UK. There are three different versions available: one for private companies limited by shares; one for private companies limited by guarantee; and one for public limited companies (PLCs).
However, these articles are not right for everyone, so some companies choose to alter certain parts of the Model articles to better suit their individual needs. It is also possible to create completely bespoke articles from scratch, usually with professional advice and guidance from a company formation agent or solicitor.
What information can be found in the articles of association?
In general terms, articles of association govern how a company should be run. Examples of the provisions (i.e. clauses/terms) included in the model articles for private companies limited by shares are as follows:
- the rights of shareholders
- the appointment and removal of company directors
- directors’ duties and powers
- issuing and transferring shares
- distribution of shareholders’ dividends
- company resolutions
- procedures for board meetings and general meetings
Many items of interest and importance relating to the running of a company are referred to within the articles, so this document must be considered at all times, in addition to any company resolutions (i.e. formal decisions made by the directors or shareholders) and/or shareholders’ agreement that supplements your company’s constitution.
The Model articles for private companies limited by shares are only suitable for companies with Ordinary shares. However, it is possible (and indeed commonplace) to amend these default articles to include multiple share classes.
Different types of shares are required when there is a need for members to have varying rights, such as voting rights or dividend rights. Quality Company Formations provides a Multiple Share Class Package at a cost of just £69.99.
Where can I find my company’s articles of association?
Articles must be adopted as part of the company registration process, so you will need to choose your articles before incorporation. Upon company formation, the articles become a matter of public record and can be viewed online via Companies House Service.
If you set up a company through a formation agent, articles are normally included with all company formation packages. In most cases, only Model articles will be supplied, but some packages will give you the option of creating amended or bespoke articles to suit your company’s specific needs.
Once your company has been registered at Companies House, your company formation agent should provide you with copies of your company formation documents in digital and/or hardcopy format. This important set of documents comprises the articles of association, the memorandum of association, the certificate of incorporation, and share certificates (if your company is limited by shares).
You should keep your company formation documents safe in your company register, which should be stored at your registered office or single alternative inspection location (SAIL) address.
Who can see my articles of association?
Every member and director of the company should have access to your articles to ensure corporate compliance and the smooth running of the business. The public can also view your articles online by searching for your company listing on Companies House Service.
Can I change my articles of association?
Company members have the power to change the articles of association at any point after incorporation by passing a special resolution, which requires 75% of eligible votes to be cast in favour of the change. A copy of both the resolution and the revised or new articles must then be delivered to Companies House within 15 days of the resolution being passed.
