Overview of Articles of Association
Every company registered in the UK must have Articles of Association. They are neither optional nor a Companies House formality. They are the documents that govern how your company operates, who can make decisions, how shares are transferred, what directors can and cannot do, and what happens when shareholders disagree.
Despite their importance, Articles of Association are one of the most overlooked documents in small and medium-sized businesses. Many companies are incorporated using default model articles without any review of whether those articles actually suit their structure or intentions. Problems that stem from this tend to surface at the worst possible moment during a dispute, a funding round, or an attempted exit.
This guide explains what Articles of Association are, what they cover, how they work in practice, and when you should review or update them.
What Are Articles of Association?
Articles of Association are the constitutional document of a UK limited company. They set out the internal rules by which the company is governed.
Under section 18 of the Companies Act 2006, every company incorporated in the UK must have articles, and those articles must be registered with Companies House at the point of incorporation. Once registered, they become public documents, available for anyone to view via the Companies House register.
Under section 33 of the Companies Act 2006, the articles bind the company and its members as if each member had signed them as a contract. This means both the company and its shareholders can rely on and enforce the provisions within them.
Articles of Association vs Memorandum of Association
These two documents are often mentioned together and sometimes confused.
The Memorandum of Association is a short document signed by the founding shareholders at the point of incorporation. Under the Companies Act 2006, its role is narrow; it simply records that the subscribers intend to form a company and agree to become its first members. It cannot be amended after incorporation.
The Articles of Association are the substantive document. It governs ongoing company operations and can be amended over time as the business changes. In practice, when people refer to a company’s constitutional documents, they almost always mean the articles.
Model Articles vs Bespoke Articles
When a company is incorporated, it has two options.
Model Articles are the standard default articles prescribed by The Companies (Model Articles) Regulations 2008 under the Companies Act 2006. There are separate versions for private companies limited by shares, private companies limited by guarantee, and public limited companies. If a company does not register its own articles at incorporation, the relevant model articles apply automatically in full.
Model articles are deliberately simple and designed to cover basic scenarios. For a sole director running a straightforward business, they may be adequate. For any company with more than one shareholder, external investors, or a more complex ownership structure, they rarely cover everything the parties need.
Bespoke Articles are customised documents drafted to reflect a company’s specific requirements. They may incorporate all or part of the model articles but add, remove, or modify provisions to suit the company’s particular share structure, investor arrangements, or governance needs.
What Articles of Association Cover
The specific content varies by company, but most articles address the following areas.
Amending Articles of Association
Articles can be changed after incorporation, but doing so requires a special resolution. Under section 283 of the Companies Act 2006, a special resolution must be passed by a majority of not less than 75% of the votes cast by members entitled to vote.
Once passed, the amended articles and a copy of the special resolution must be filed with Companies House within 15 days. The amended articles take effect from the date the resolution is passed, not the date Companies House registers them.
Some provisions can be entrenched, meaning they require a threshold higher than 75%, up to and including unanimous agreement, before they can be changed. Any entrenched provisions must be stated as such in the articles and notified to Companies House. Where an entrenched provision is being altered or removed, specific notice must also be given to Companies House.
It is also important to note that the Companies Act 2006 takes precedence over a company’s articles. Any provision in the articles that conflicts with the Act is unenforceable.
Why Model Articles Are Often Not Enough
Model articles work well for simple structures, but leave several gaps that become significant as a company grows or brings in outside shareholders.
They do not include drag-along or tag-along rights, which determine what happens when a majority shareholder wants to sell the company. They contain no deadlock provisions for resolving disputes in a 50/50 ownership structure. They do not address good-leaver and bad-leaver provisions, which govern what happens to a director-shareholder’s shares if they leave the business on different terms. They make no provision for what happens on the death or incapacity of a shareholder.
None of these gaps matters until they do, at which point amending the articles requires the agreement of at least 75% of shareholders, which is not always straightforward once a dispute has already arisen.
Articles of Association & Shareholders' Agreements
Articles of Association are often used alongside a shareholders’ agreement. These two documents serve different but complementary purposes.
The articles are a public document registered with Companies House and govern the company’s constitution. A shareholders’ agreement is a private contract between shareholders that addresses matters the parties do not want on the public record, such as specific obligations of individual shareholders, valuation mechanisms for share transfers, or how disputes will be resolved.
Where the two documents conflict, a well-drafted shareholders’ agreement can govern the shareholders’ rights and obligations, but it cannot override the company’s statutory obligations under the Articles.
When to Review Your Articles of Association
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When a new investor or shareholder joins the company
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When the company raises external finance or takes on significant debt
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When a director-shareholder leaves the business
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When the ownership structure changes
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Before a sale process or exit
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When the company expands into new activities that fall outside its original scope
In each of these situations, the existing articles may not reflect the parties’ current intentions. Updating them at the right moment is considerably simpler than resolving ambiguity after a dispute has already developed.
It is also worth conducting a broader compliance review at the same time. Under the Economic Crime and Corporate Transparency Act 2023, Companies House now requires all directors to verify their identity. New directors must provide a Companies House personal code at the point of appointment. Existing directors must do so when the company files its next confirmation statement. A company cannot file a confirmation statement until all directors have met the verification requirement. Any article review is a natural prompt to check that all directors are verified and that the company’s confirmation statement obligations are up to date.
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Articles of Association are the foundation on which a company’s governance is built. Many businesses receive attention once incorporated and are never looked at again. Which is usually fine until something changes, a relationship breaks down, or a transaction requires scrutiny of the company’s actual structure.
The model articles are a starting point, not a finished product. A sole director with no outside shareholders may never need to look beyond them. But any company with multiple shareholders, investor backing, or ambitions to grow or exit should treat bespoke, properly drafted articles as a basic requirement rather than an optional extra.
The time to get the articles right is before any of those moments arise. Reviewing and updating them at key stages in a company’s life is one of the most practical steps any director or shareholder can take to protect both the business and the people behind it.
Snena
Snena is an ACCA student with a flair for both numbers and design. She has the unique ability to blend strong financial insight with creative thinking to deliver smart, solution-driven content.