Articles of association
The articles of association are the rulebook of your company: they set out how decisions are made, what rights shares carry and how directors are appointed. In the UK you don’t have to write them from scratch – but you should know what they say.
The basis: model articles
Every company has articles. If you don’t file your own, the model articles for private companies limited by shares apply automatically. They cover the essentials: directors’ powers and decision-making, appointing and removing directors, issuing and transferring shares, dividends and general meetings. Alongside them, each founding shareholder signs the memorandum of association, which simply records that they want to form the company.
Extra provisions – where the value lies
With several founders or investors, the important arrangements often belong in tailored articles or a shareholders’ agreement: share vesting, good and bad leaver rules, pre-emption rights, drag-along and tag-along rights and reserved matters that need investor consent. A shareholders’ agreement is private; articles are public on the Companies House register.
Standard or tailored?
Solo founders usually manage well with the model articles. Several shareholders or an upcoming funding round justify tailored articles. Articles can be changed later by special resolution – at least 75% of the votes – and the amended version is filed with Companies House within 15 days.
Frequently asked questions
What has to be in the articles of association?
Rules on directors, decision-making, shares, dividends and meetings. If you adopt the model articles, these are covered automatically; you only need your own articles for different arrangements.
Do I need a solicitor for the articles?
Not for the model articles – you can choose them in the online application to Companies House. For tailored articles or a shareholders’ agreement, advice from a solicitor is worthwhile.
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