Last Updated February 13, 2024
Articles of Association Frequently Asked Questions
Articles of Association may also be known as:
- Model articles
- Business incorporation papers
- Company constitution
- Memorandum of association
What are Articles of Association?
Articles of Association outline how the shareholders and directors of a limited company must operate. A company creates this governing document during the incorporation process in the United Kingdom.
An Articles of Association template allows an incorporating company to create a set of rules that is custom to its unique needs and in compliance with applicable legislation. Use LawDepot’s Articles of Association template to customise your own company papers.
What are model Articles of Association?
Model Articles of Association are the default set of governing rules for incorporating companies prescribed by the Companies Act 2006. Companies House, the United Kingdom’s registry for limited companies, provides model articles.
However, if you want to customise your model articles to your company's needs, you can do so by completing Law Depot's Articles of Association questionnaire.
What is the purpose of Articles of Association?
Articles of Association provide a company with a set of rules to follow. This ensures transparency and fairness for everyone with a stake in a company and for third parties doing business with the company.
Without Articles of Association, directors and shareholders could face ongoing disagreements about how to operate the company. With a clear set of rules, directors and shareholders can manage the company consistently and fairly.
Does a company need Articles of Association?
Yes, if a company is incorporating within the United Kingdom, the company must create Articles of Association. Under the Companies Act 2006, the UK government requires companies to create Articles of Association during the incorporation process.
The UK government also requires companies to create a memorandum of association during the incorporation process which documents all the names of the initial shareholders and directors of a company.
Companies with more than one shareholder should also create a Shareholder Agreement. This document is a contract between the shareholders of a corporation. The contents in a Shareholder Agreement depends on the corporation and the shareholders, but it mainly outlines shareholder rights and responsibilities. Unlike Articles of Association, you can keep Shareholder Agreements private from the public.
What do the Articles of Association include?
When a company is in the process of creating its Articles of Association, the individual(s) creating the document should provide information for the following areas:
- Company structure: specify if the company has a sole director or multiple directors
- Shares: specify the number of share classes as well as share transfer and redeemability details
- Shareholder decision-making process: outline the rules and requirements for shareholder meetings
- Directors’ powers and responsibilities: set out the number of directors, as well as their capabilities and limitations
- Directors’ decision-making process: specify the rules and requirements for director meetings
- Appointment of directors: outline the rules for appointing new directors in the future
- Dividends and other distributions: specify how the company pays out dividends and other distributions (a dividend is a sum of money that a company pays to its shareholders out of its profits)
Can a company amend the Articles of Association?
Yes, a company can update or change its Articles of Association. A company may need to change its governing documentation for a variety of reasons, such as complying with a new law or court order.
To amend Articles of Association, a company’s directors need to agree on the change(s) in a Directors' Resolution, which is a written way for directors to document a decision they made. Creating this agreement will likely require a directors’ meeting.
Once agreed upon, the company must send the new Articles of Association, the Directors’ Resolution, and any other important documentation to Companies House.
What is Companies House?
In the United Kingdom, Companies House is the registry that incorporates or dissolves limited companies. Companies that want to incorporate must file their incorporation paperwork with the registry.
Companies House’s main responsibilities are to:
- Incorporate limited companies
- Dissolve limited companies
- Store and examine company information
- Ensure company information is available to the public
Are my company’s Articles of Association public?
Yes, once registered with Companies House, a company’s Articles of Association are public documents.
It’s important that Articles of Association documents are available to the public because consumers and potential members need transparency about the companies that they choose to support or get involved with.
What happens if a company doesn’t create Articles of Association?
If a company fails to create its own Articles of Association, legislation provides the company with default articles. The default articles are legally sound and protect the rights and responsibilities of members but aren’t customised to the unique needs of a specific company.