Who determines how directors make decisions, how shareholders vote, or whether shares can be transferred? The answer is simple. In most UK companies, these matters are regulated by the articles of association.
The articles are the company’s internal regulations. In fact, they are typically established at the time of incorporation; however, they remain relevant throughout the company’s life. This is especially important when directors make significant decisions, new shareholders join, investments are raised, or ownership arrangements change.
Under the Companies Act 2006, every company must have articles of association. The articles are legally binding on the company and its members and set out rules for how the company is run.
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What is an Article of Association in the UK?
To understand what articles of association are, keep in mind that they are a company’s internal rulebook that explains the decision-making process, director powers, and share rights. Furthermore, the document explains the decision-making process, the process for issuing and transferring shares, and the rules for company administration and meetings. In the United Kingdom, every company must have articles of association. A company can use the model articles, adopt them with amendments, or use bespoke articles, depending on its circumstances and company type.
What are the Key Components of Articles of Association (AOA)?
Each company requires clear rules that define authority, decision-making processes, and internal governance. In the United Kingdom, the key components of articles of association provide this framework. However, their precise contents depend on the company’s type and any bespoke provisions adopted by its members. The following are the key components of articles of association:
- Director roles: The articles define the appointment, decision-making, powers, and responsibilities of directors.
- Share-related provisions: Depending on the company’s structure and articles, they may cover share rights, transfers, and provisions relating to different classes of shares and distributions.
- Shareholder rights: The document sets out shareholders’ voting rights, meeting quorum, and decision-making processes such as veto rights.
- Administrative regulations: The articles include how official documents and notices are administered.
- Company Structure: The articles explain how the company is structured, including shareholders, directors, and company officers.
Why Do Articles Of Association Matter In The UK?
As mentioned earlier, the articles of association establish the internal rules for managing a company and making decisions, which is why they are significant. Before directors or members take significant corporate action, they should consider the Companies Act 2006, the company’s articles of association and, where relevant, any shareholders’ agreement. The articles explain the decision-making process, including quorum requirements, resolutions, voting, and meetings.
In addition, they may clarify the powers of directors, identify matters that require member approval, and regulate director appointments, share issues and transfers, dividends, and other distributions.
When Should Companies Amend The Articles of Association?
Remember that whenever your business requirements evolve, the law changes, making the current regulations unlawful, or a court orders it, you should amend your company’s Articles of Association. Additionally, you may need to revise them to address governance gaps, including clarifying regulations for single directors or relocating business objects.
What are Model Articles of Association?
The Companies Act 2006 provides for standard rules known as “model articles of association“. They can apply by default when a company does not specify that it is adopting different articles during incorporation. Let’s have a look at different types of model articles of association.
| Company Type | Applicable Model Articles |
| Private company limited by shares | Model articles designed for private companies limited by shares. |
| Private company limited by guarantee | Model articles designed for private companies limited by guarantee. |
| Public limited company (PLC) | Designed for larger companies offering shares to the public |
Key Takeaways:
- Every UK company must have articles of association. If the company does not specify different articles during incorporation, the relevant model articles can apply by default. Companies can also adopt bespoke articles or amend the model articles, subject to the Companies Act 2006 and other legal requirements.
Can I Write My Own Articles Of Association?
Yes. You can create bespoke articles of association and submit them when incorporating your company, or you can use the model articles as a starting point and amend them where appropriate. If you make changes after incorporation, the relevant shareholder approval and Companies House filing requirements must be followed.
However, bespoke articles must comply with the Companies Act 2006, suit the company’s legal structure, and accurately reflect matters such as director powers, voting procedures, and share rights.
What is the Difference Between Model And Bespoke Articles?
When registering a company, the founders may either compose bespoke articles or use model articles provided by the UK Government. This ensures the articles are customised to meet the company’s needs.
| Model Articles | Bespoke Articles |
| They are the standard model rules provided under company law. | Customised to specific business needs and wants. |
| They may be suitable for companies with relatively straightforward governance and ownership arrangements. | It is ideal for complex company structures or companies with multiple classes of shares. |
| This rule is quick and easy to implement because it requires no bespoke drafting | This should be drafted by a legal expert to ensure legal compliance and accuracy. |
What are MOA and AOA?
The abbreviations MOA and AOA are generally used to refer to the memorandum of association and articles of association, respectively. These documents are often referenced together; however, they serve distinct purposes under current UK company law. Look at the table below to help you better understand the difference between MOA and AOA.
| Memorandum of Association | Articles of Association |
| Records the subscribers’ agreement to form the company and become its members | Establishing the ongoing internal rules for running and governing the company |
| It is created as part of the incorporation process | Adopted when the company is incorporated and may later be amended by shareholders |
| Under the Companies Act 2006, once the company is registered, the Memorandum of Association filed at incorporation cannot be edited or updated | Can generally be amended by special resolution and subject to any legal restrictions |
| MOA provides evidence of the subscribers’ original agreement to form the company | If a company adopts bespoke articles at incorporation, it must provide the articles as part of the incorporation application. If it adopts the model articles in full, a separate copy of the model articles does not generally need to be submitted because they are already prescribed by law. |
Can Articles Of Association Be Changed?
Yes. A company can generally amend its articles after incorporation by passing the required shareholder resolution, usually a special resolution. However, the company’s existing articles may contain entrenched provisions or other requirements that must also be followed. Once the amendment has been approved, the company must deliver the relevant resolution and amended articles to Companies House within the applicable filing deadlines. Generally, the special resolution must be delivered within 15 days of being passed, while the amended articles must be delivered within 15 days of the amendment taking effect.
Where Do I Find My Company’s Articles Of Association?
You can usually find your company’s articles in its company records and, where they have been filed, through the company’s Companies House filing history. You can also ask your accountant, solicitor or company formation agent if they helped establish the company. More importantly, if you hired an accountant, a solicitor, or a company formation agent to incorporate your company, they may also have a copy.
How to Amend Articles of Association?
The procedure for amending a company’s articles of association is as follows:
Examine The Current Articles
Check the existing articles for any entrenched provisions, class rights or other requirements that may affect how the amendment must be approved.
Prepare the Amendments:
Next, draft the suggested modifications and provide a complete revised version of the articles.
Pass A Special Resolution
Generally, amendments to the articles are approved by the members through a special resolution. A special resolution normally requires at least 75% of the votes cast, subject to any additional requirements in the company’s articles or applicable law. Moreover, you can keep the resolution and updated articles in the company’s statutory records.
File with Companies House
You must submit a copy of the amended articles and special resolution you passed within 15 days of passing the resolution. In addition, any forms that are necessary for the specific amendment must be submitted.
How Do Companies Send the MOA and AOA to Companies House?
When incorporating a company, the memorandum and articles form part of the incorporation documentation. If you incorporate online, the memorandum can be generated automatically as part of the registration process. If you use bespoke articles, you must provide them as part of the incorporation application. Companies can also incorporate by post using the appropriate Companies House forms and documents.
The Bottom Line
Articles of association are an essential component of a company’s legal framework, as they establish how directors and members make decisions and how the business is governed. Model articles may be suitable for companies with simple ownership and governance structures. Amended or bespoke provisions may be more suitable in cases where voting, investment, or share arrangements are inherently complex. Furthermore, as companies grow, reviewing the articles can ensure that their governance regulations are suitable and legally effective.
Whether you’re just forming your company or already knee-deep in paperwork, our London-based accountants are ready to jump in. One quick call and we’ll figure out what you actually need.
Struggling With Your Company’s Articles Of Association?
If you are still unsure whether your existing articles of association remain suitable, well, evaluating them can be difficult because ownership, investment and governance arrangements change. At LimitedCompanyAccountants, our accountants can help you review your company’s records, share structure, and Companies House filings. We also identify any potential inconsistencies and work with your legal advisor to create custom drafting services.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. Always consult with a professional accountant to ensure compliance with UK laws and regulations.
