Orr Litchfield

Solicitors and Business Lawyers

Articles of Association

What are Articles of Association?

The Articles of Association (‘Articles’) are one of the two constitutional documents of a company in the UK – the other being the Memorandum of Association.  Every company must have Articles.

The Articles regulate the internal affairs of the company, forming the basis of a statutory contract between the company and each of its members (in their capacity as members). They deal with a range of management and administrative matters relating to the company including, board and shareholder meetings, the powers and duties of directors, the issue and transfer of shares, dividends, and borrowing powers.

Companies have a significant amount of freedom in drafting their Articles. However, they are subject to relevant provisions of the Companies Acts. UK legislation provides default Articles for ease of use by those incorporating limited companies. Prior to 1st October 2009, Companies limited by shares could adopt standard Articles as prescribed by what was known as Table A to the relevant Companies Act. Since that date, newly incorporated companies have been able to adopt one of the forms of model Articles set out in the Companies (Model Articles) Regulations 2008 depending on the nature of the company.

Newly incorporated companies do not have to adopt the model Articles relevant to their type of company. They may adopt some of the model Articles or none of them. However, if Articles are not registered, or to the extent that those that are registered do not exclude or modify the relevant model Articles, then those model Articles will be treated as applying.

The Articles are a public document open to inspection at Companies House in the UK. As a consequence, shareholders often enter into separate private contracts, known as shareholders’ agreements, in order to regulate their arrangements in relation to a company.