Under the Companies Act 2006, all private limited companies registered in the UK are required to adopt certain legal documents, including the articles of association. Use these articles of association to set out the rules according to which your company must be run and administered.
When should I use the articles of association?
Use theses articles of association:
for private company limited by shares
to set out how the company should be run
for companies located in England, Scotland or Wales
What is included in the articles of association?
Theses articles of association cover:
the directors' powers and responsibilities
the directors’ decision making procedures (eg how decisions should be taken, quorum for and chairing of directors meetings, how to deal with conflicts of interest etc)
the appointment of directors (including termination, remuneration and expenses)
shares and distributions (eg issuing and transferring shares, payment of dividends, authority to capitalise profits etc)
the shareholders’ decision making procedure (eg quorum for and chairing of general meetings, voting matters and amendments to resolutions)
administrative arrangements (including means of communication to be used, company seals and directors' insurance and indemnity)
What are articles of association?
The articles of association are a company’s internal rulebook, which set out how the business will be run and decisions made. The articles lay out how tasks are to be accomplished within the organisation, including the process for appointing directors and the handling of financial records.
Do I need articles of association?
You will need to create articles of association when you are registering a company in the UK. These articles of association should be used where you are registering a private company limited by shares.
How do the articles of association operate?
The articles of association form a contract of membership between the company and shareholders.
Directors are not a party to the contract and will not be in breach of contract for breaching anything under the articles; however they have their own director's duties and are subject to their directors' service agreements.
Where do the articles of association need to be stored?
The articles of association are a publicly available document. As a result, a copy of the articles needs to be held at Companies House, where they are accessible to the public.
A copy of the articles of association should also be kept at the company's registered office or a single alternative inspection location (SAIL) address. A SAIL address is an alternative location to the registered office, where company records can be kept and made available for public inspection. Where you are using a SAIL address, Companies House needs to be notified.
What other documents are needed when registering a company?
When setting up a company, you may need several other documents in addition to the articles of association. These include:
a memorandum of association (a statement signed by all initial company shareholders confirming their intention to form a company and become shareholders on formation)
a shareholders agreement (which defines the roles, rights and obligations of company shareholders)
share certificates (proof that the individual named on the certificate hold shares in the company)
Ask a lawyer for advice if:
you require bespoke articles of association
the company isn’t a private company limited by shares (eg if the company is limited by guarantee)
the company isn’t based in England, Wales or Scotland
you need help registering a company
These articles of association are governed by the law of England, Wales and Scotland.