The rules governing how a company operates are set out in its articles of association. Articles of association are a document that is adopted when the company is incorporated and can later be amended by shareholders in accordance with the Companies Act 2006.
In the UK, starting a limited company involves more than choosing a business name and registering with Companies House. You need the most important legal document, the AOA.
Whether you are forming a new business or reviewing your company’s legal documents, understanding the AOA is important to ensure your business complies with UK company law and avoids future disputes. This guide explains what articles of association are, what they include, why they matter, and how they can be amended.
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What are Articles of Association?
Articles of association are a company’s internal governing document that sets out how the company will be managed, the rights of shareholders, and the responsibilities of directors. Additionally, the document explains how decisions are made, the procedures for issuing and transferring shares, and the rules for meetings and company administration.
In the UK, every company registered with Companies House must have AOA, either using customised articles or by adopting the Model Articles. If bespoke articles are not submitted during incorporation, the applicable Model Articles generally apply by default.
Why are Articles of Association Important and Why Do You Need Them?
The AOA document is important because it provides a clear framework for managing your company. It helps prevent misunderstandings by defining how important decisions should be made.
Furthermore, the document helps ensure the company is run in accordance with its own rules and the Companies Act 2006. This reduces the risk of disputes and supports effective corporate governance.
Key benefits of articles of association include:
- Establishes clear management rules.
- Defines powers and responsibilities of directors.
- Protects the rights of the shareholders.
- Explains voting procedures.
- Sets rules for issuing and transferring shares.
- If there are any disputes between shareholders, it helps resolve them.
- Ensures compliance with the Companies Act 2006.
Without a properly drafted AOA, your company may face uncertainty in making internal decisions.
Do Sole Director Companies Need Articles of Association?
Yes, a sole director company must have AOA. These articles define the rules for managing the company and the director’s powers. If you are a sole director company, you can use the standard Model Articles or adopt bespoke articles when incorporated.
What are Model Articles of Association?
Under the Companies Act 2006, most companies limited by shares may adopt the Model Articles prescribed by legislation unless they choose bespoke articles. These standard sets of rules are called model articles of association. They govern how a company is managed, including shareholders’ rights, directors’ powers, decision-making, share issuance, and company meetings.
Are Model Articles Suitable for Every Business?
No, model articles are not always suitable for every business. They are suitable for many standard private limited companies. However, if your business has multiple shareholders, different share classes, or specific governance requirements, you may benefit from bespoke AOA tailored to your needs.
What is MOA and AOA?
Memorandum of Association (MOA) and articles of association are two legal documents required when forming a private limited company in the UK.
Memorandum of Association
For companies incorporated under the Companies Act 2006, the MOA becomes a historical document that records the subscribers’ intention to form the company. It does not function as an ongoing governance document. Once your company is incorporated, the MOA is usually not amendable.
Articles of Association
The AOA set out the rules for how the company is run. Unlike the Memorandum of Association, the AOA can be amended by the shareholders by passing a special resolution, subject to the Companies Act 2006.
What’s the Difference Between Memorandum and Articles of Association?
When incorporating a company in the UK, you need both MOA and AOA, but they serve different purposes. Look at the table below for a quick comparison between them:
| MOA | AOA |
| Confirms that the original subscribers agree to form the company. | Sets out the rules for how the company is managed and controlled. |
| Signed during incorporation. | Governs the company’s ongoing management. |
| Usually cannot be amended. | Can be amended later by shareholders. |
| Records the names of the first members. | Defines shareholders’ rights, directors’ powers, voting procedures, dividends, share transfers, and other governance rules. |
| Has a limited role after the company is formed. | Continues to govern the company’s day-to-day operations throughout its existence. |
What is Included in the Articles of Association?
Usually, the AOA typically include provisions covering:
Directors’ Powers
The articles define the authority of directors, including their decision-making powers and responsibilities.
Company Structure
They explain how the company is organised, including shareholders, directors, and company officers.
Shareholder Rights
The document sets out shareholders’ voting rights, participation in company decisions, and dividend entitlements.
Share Transfers
The article explains whether shareholders can sell or transfer shares and any restrictions that apply.
Meetings and Voting
Articles of association specify how board meetings and shareholder meetings should be conducted, including voting procedures.
Administrative Matters
The articles include provisions covering company communications, the use of a company seal (if applicable), company records, and directors’ indemnity and insurance.
Appointment and Removal of Directors
The document sets out the procedures for appointing new directors or removing existing ones.
Can a Company Change Its Articles of Association?
Yes. A company can amend its AOA after incorporation if needed. To make changes, you need to pass a special resolution approved by at least 75% of shareholders. Additionally, a copy of the special resolution together with the amended articles must be filed with Companies House within 15 days. Any amendments must comply with the Companies Act 2006.
For further guidance, visit the official Companies House guidance on changing your company’s articles of association.
How to Amend Articles of Association?
Here is the step-by-step-amendment process for AOA:
Board Approval
Hold a meeting of directors to approve the proposed amendments. The board will draft a resolution outlining the text to be added, changed, or deleted. Also, you need to check whether the shareholders’ agreement contains restrictions, consent requirements, or veto rights that could affect the changes.
Pass a Special Resolution
Pass a special resolution requiring at least 75% of voting shareholders to agree to the changes.
File with Companies House
You must send the resolution you passed and the new AOA to Companies House within 15 days of passing the resolution.
Update Company Records
Next, you must update the company’s statutory records and keep a copy of the amended AOA with the company’s records at the registered office.
Where Do I Find My Company’s Articles of Association?
You can find your company’s articles of association in your company records or by searching on the Companies House register for your company. They are usually available to download as part of the company’s filing history. If you hired an accountant, a solicitor, or a company formation agent to incorporate your company, they may also have a copy.
Can I Write My Own Articles of Association?
Yes, you can write your own AOA or use standard model articles for a UK company, but they must comply with the Companies Act 2006 and do not contain any unlawful provisions. When you write your own AOA, they are called bespoke articles, and they must still follow the UK Companies Act 2006.
Custom Articles may be useful for companies with different share classes, multiple shareholders, investor agreements, or specific rules about director powers. Since articles are a legally binding document, drafting them requires careful consideration. Many businesses seek advice from an accountant or a solicitor to ensure their Articles properly protect the company and its shareholders.
What Happens If Articles of Association Conflict With the Companies Act?
If the AOA conflict with the Companies Act 2006, the Companies Act takes precedence. Under UK company law, the Companies Act 2006 always overrides any provision in a company’s articles that conflicts with it. As a result, the conflicting article is void, illegal, and unenforceable.
What Articles of Association Templates Should You Use?
Usually, many UK businesses look for AOA templates online. They can offer a useful starting point, but they may not suit every company. A standard template might not adequately cover multiple shareholders, investor protection, family businesses, joint ventures, and complex ownership structures.
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To Sum Up
Every UK limited company needs to understand articles of association as they provide the legal framework that governs how your company operates, defines directors’ responsibilities, protects shareholders, and supports effective decision-making.
Whether you are forming a new company, planning future growth, or updating your governance documents, keeping your articles accurate and up to date is a crucial part of good business management. You should review them regularly to ensure they continue to meet your company’s needs and comply with UK law.
Whether you are forming your first limited company or updating your governance documents, MicroEntityAccounts can help you prepare incorporation paperwork, review your articles of association, and ensure your company remains compliant with UK company law.
Disclaimer: All the information provided in this article is general in nature; it does not intend to disregard any professional advice.
