What information is included in Articles of Association?
A company’s Articles of Association contain the internal rules for managing and operating the company. They explain how directors make decisions, how shareholders vote, how shares may be issued or transferred, and how company meetings and distributions are handled.
Every UK limited company must have Articles of Association. A company can use the standard model articles or adopt customised articles designed for its ownership and management structure.
Articles of Association are legally binding rules governing how a UK company is run. They form part of the company’s constitution and apply to the company, its directors and its shareholders.
The Articles help establish:
The exact provisions depend on whether the company uses the standard model articles or has adopted its own customised version.
The Articles usually begin by defining important terms used throughout the document.
These may include terms such as:
These definitions help ensure that the rules are interpreted consistently.
For a private company limited by shares, the Articles normally confirm that each shareholder’s liability is limited to any amount unpaid on their shares.
For example, if a shareholder owns fully paid shares, they will generally have no further liability for the company’s debts merely because they are a shareholder.
The Articles explain the directors’ authority to manage the company.
They may cover:
Under the standard model articles, directors are responsible for managing the company’s business and may exercise the company’s powers, subject to the Articles and applicable law.
The Articles normally include rules relating to the appointment and termination of directors.
These rules may explain:
The Companies Act 2006 also contains legal procedures that may apply when shareholders want to remove a director.
The Articles establish how directors make valid company decisions.
This may include rules covering:
These provisions are especially important when a company has two or more directors.
The Articles may contain procedures for dealing with situations in which a director has a personal interest in a proposed transaction or company decision.
They may specify:
Companies with several directors or external investors may need customised conflict-of-interest provisions.
For a company limited by shares, the Articles may explain how shares are managed.
They can include rules relating to:
A company with only one class of ordinary shares may find that the model articles are sufficient. A company with preference shares, alphabet shares or non-voting shares may require customised articles.
The Articles may set out the procedure for transferring shares from one person to another.
They can cover:
They may also explain what happens to shares when a shareholder dies, becomes bankrupt or loses legal capacity. This is known as the transmission of shares.
Standard model articles do not contain every protection that the owners of a private company may want. More detailed transfer restrictions are often included in customised articles or a shareholders’ agreement.
The Articles explain how the company may declare and pay dividends or make other distributions to shareholders.
They may cover:
A company can only pay dividends when it has sufficient distributable profits and follows the relevant legal requirements.
The Articles usually include rules for organising general meetings of shareholders.
These provisions may explain:
Private companies are not normally required to hold an annual general meeting unless their Articles require one.
The Articles set out how shareholders exercise their voting rights.
They may cover:
Some decisions can be passed by an ordinary resolution, while more significant decisions require a special resolution.
The Articles may also include administrative rules relating to:
These rules support the company’s day-to-day administration.
The Articles usually do not provide a complete list of the company’s current:
This information is generally recorded in statutory registers, Companies House filings, the statement of capital or the company’s accounting records.
A company’s share-class rights may appear in its Articles, but its current number of shares and shareholder details are usually confirmed through its statement of capital and register of members.
Model articles are the standard default Articles that many UK limited companies use. Separate versions exist for private companies limited by shares, private companies limited by guarantee and public companies.
For a private company limited by shares, the official model articles are divided into the following main areas:
The standard model articles are suitable for many straightforward companies, particularly those with one class of ordinary shares. They may not provide enough detail for companies with several shareholders, investors or complex share rights. The official versions are available through Companies House on GOV.UK.
Yes. A UK company may adopt customised Articles instead of relying entirely on the model articles.
Custom Articles may be useful when the company has:
Custom provisions must comply with the Companies Act 2006 and other applicable law.
A company can normally amend its Articles by passing a special resolution, which generally requires at least 75% of the votes cast.
The company must then send the required resolution and updated Articles to Companies House within the applicable filing deadlines. A company should review the legal and tax effects before changing share rights, voting arrangements or ownership protections.
The Articles determine how important company decisions can be made. Problems may arise when the company’s owners assume that certain rights or restrictions exist but they are not included in the Articles or another binding agreement.
Reviewing the Articles can help when:
The Articles and a shareholders’ agreement can both govern the relationship between shareholders, but they are different documents.
The Articles are part of the company’s constitution and are generally available through the public Companies House record. A shareholders’ agreement is usually a private contract between some or all of the shareholders.
A shareholders’ agreement may contain more detailed provisions covering confidentiality, business strategy, shareholder obligations, dispute resolution and exit arrangements. Its terms should be coordinated with the Articles to avoid conflicts.
Yes. Every UK limited company must have Articles of Association setting out rules for operating the company, as required under the Companies Act 2006.
Not necessarily. Current ownership is normally confirmed through the company’s register of members and its latest statement of capital rather than the Articles alone.
They may contain rights and restrictions attached to different classes of shares. Relevant rights may also appear in resolutions and the statement of capital.
Yes. A company’s filed Articles can normally be viewed and downloaded from its Companies House record.
Yes. The company can adopt new or amended Articles by following the required approval and Companies House filing procedures.
Articles of Association contain the principal internal rules for running a UK company. They commonly cover directors’ powers, board decisions, shareholder voting, meetings, shares, transfers, dividends and administrative procedures.
The model articles may be suitable for a simple company, but businesses with multiple shareholders, different share classes or external investors may benefit from tailored provisions. Professional legal advice should be considered before adopting or changing customised Articles.
This article provides general information and does not constitute legal advice.