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Articles of Association
"I need Articles of Association for a private limited company with three directors, specifying a share capital of £50,000 divided into 50,000 shares of £1 each, with pre-emption rights on share transfers, and provisions for electronic meetings and decision-making."
What is an Articles of Association?
Articles of Association form the core rulebook that governs how a UK company operates internally. They spell out everything from how directors make decisions to how shares can be transferred, essentially acting as the company's constitution and creating binding rules between shareholders and the business.
While companies can adopt standard articles (known as Model Articles) when they register, many choose to customize them to fit specific needs. These articles must be filed with Companies House and can be changed later through a special resolution, requiring at least 75% of shareholders to agree to any modifications.
When should you use an Articles of Association?
Companies need Articles of Association from day one of registration with Companies House - it's a legal requirement. But the real value comes when setting up specific arrangements between shareholders, like giving certain members extra voting rights or restricting share transfers to keep the business within a family.
Most startups and small businesses start with Model Articles, but you'll need customized Articles of Association when bringing in investors, creating different share classes, or establishing unique management structures. They're also essential when setting up joint ventures or implementing employee share schemes.
What are the different types of Articles of Association?
- Business Articles Of Incorporation: Standard Model Articles for private companies, covering basic governance and shareholder rights
- Articles Of Incorporation Nonprofit: Tailored for charitable organizations, including specific provisions for non-profit status and public benefit
- Limited Liability Company Articles Of Organisation: Customized for LLCs with detailed management structures and member rights
Who should typically use an Articles of Association?
- Company Directors: Responsible for ensuring the company follows its articles and making decisions within their scope
- Shareholders: Bound by and benefit from the articles, with rights to vote on changes through special resolutions
- Corporate Lawyers: Draft and modify articles to protect client interests and ensure legal compliance
- Company Secretary: Maintains and updates the articles, ensures proper filing with Companies House
- Companies House: Reviews and registers articles as part of company formation and subsequent amendments
How do you write an Articles of Association?
- Company Details: Gather basic information including company name, registered office, share structure, and director details
- Business Model: Define key operational needs like share transfer rules, voting rights, and decision-making processes
- Stakeholder Input: Consult with shareholders about their preferred rights, restrictions, and governance structure
- Template Selection: Choose between Model Articles or custom provisions using our platform's legally-sound templates
- Internal Review: Check alignment with business objectives and ensure all mandatory elements are included before filing
What should be included in an Articles of Association?
- Company Name & Purpose: Full registered name, type of company, and main business objectives
- Share Structure: Classes of shares, rights attached, and transfer restrictions
- Director Powers: Decision-making authority, appointment process, and removal procedures
- Meeting Rules: Procedures for general meetings, voting rights, and quorum requirements
- Administrative Provisions: Company secretary role, record-keeping, and communication methods
- Amendment Process: Procedures for changing articles through special resolutions
What's the difference between an Articles of Association and a Memorandum of Association?
Articles of Association and the Memorandum of Association serve different but complementary roles in company formation. While they were historically required as separate documents, modern UK companies typically only need Articles of Association, with a simplified Memorandum created automatically during registration.
- Internal vs External Focus: Articles govern internal operations and relationships between company members, while the Memorandum states the company's existence and basic details to the outside world
- Modification Flexibility: Articles can be amended through special resolution, but the Memorandum remains largely static after incorporation
- Scope of Content: Articles contain detailed rules about running the company, share rights, and decision-making processes, whereas the Memorandum simply confirms the founders' intention to form a company and basic details
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