During the process of registering your company, you formed:

• A ‘Memorandum of Association’ – a legal statement signed by all initial shareholders or guarantors agreeing to form the company.
• ‘Articles of Association’ – written rules about running the company agreed by the shareholders or guarantors, directors and the company secretary.

What are Articles of Association for?

Articles of Association are a statutory legal document that forms the basis of your company’s constitution, and are a public document open to inspection at Companies House.

The Articles of Association defines the company’s:

• Share structure.
• Rights attached to different share classes.
• Details how the company will be governed
• Outlines rules and protocols for the appointment and removal of company directors.
• Defines the procedures and provisions concerning the sale or transfer of company shares.

To change or adopt Articles of Association, you need agreement from your shareholders. This includes things like your business activities, and what your business actually does. Every shareholder and every director of a company needs to act in accordance with a company’s articles of association.

Can you write your own Articles of Association?

Many new companies use standard Articles of Association known as ‘model Articles’. New business owners can download model Articles from the Gov.uk website, which have been created by Companies House in line with the Companies Act 2006. The model articles have been drafted and approved by the government and are a good standard set out articles. However, they are inevitably a compromise and are best suited to companies with just one shareholder or where there is no chance of the shareholders disagreeing.

What Articles should your company adopt?

Although model Articles greatly simplify the process of company formation, new businesses can choose to write their own Articles if the model Articles don’t meet their requirements. However, it is important to bear in mind that if you do you choose to write your own Articles it will make your company’s registration process more complicated, and you will need to register the company in writing rather than registering online.

If you are unsure which articles you require or whether you need bespoke articles then please contact us as the choice of articles is one of the most important decisions for a company.

How to change your company’s Articles of Association

New Articles of Association may be adopted by the shareholders passing a special resolution in a general meeting or by written resolution.

Articles of Association can be amended in a number of ways:

• Changing the wording of clauses of existing articles.
• Adding new clauses or removing existing ones.
• Replacing the articles of association with the model articles.
• Replacing the previous set of articles with the new personalised set.

If you need to update your business activities and formalise these changes in your company’s Articles of Association, you can normally do this by having the shareholders pass a ‘special resolution’ – one that’s agreed by at least 75% of the shareholders. This can be done either by written resolution or in a shareholder meeting. A copy of the resolution and the new articles of association must be sent to Companies House within 15 days.

Ensure that any changes you make are legal and fair, and are in the interests of the entire company, not just a specific group of people. Changes can’t be made if they can’t be reversed or altered in the future. However, it’s possible to make changes that set conditions for alternations.

Advice on adopting a new Articles of Association

If and when you do need to draft or amend your company’s Articles of Association, reach out for expert advice to to make this process as straightforward as possible and ensure you fulfill all your statutory obligations.