Articles of Association

A Complete Guide to Articles of Association (UK Companies)

Articles of Association are the legal rules that govern how a UK limited company is run. They set out the powers of directors, how decisions are made and the rights of shareholders - forming the company’s core constitutional framework.

This guide explains what Articles of Association include, how they work, when they need updating and how to create or amend them in line with UK company law.

CONTENTS

What Are Articles of Association?

Articles of Association (often called “Articles”) are a company’s internal rulebook. They form a legally binding contract between the company and its shareholders, setting out how the business is run, how decisions are made and what powers directors and shareholders have.

In the UK, every company incorporated under the Companies Act 2006 must have Articles of Association. They work alongside the Memorandum of Association and define essential governance rules, including:

• How directors are appointed and what powers they have
• How shares are issued, transferred or sold
• Shareholder rights and voting procedures
• Rules for meetings, notices and company administration

Articles ensure the company is managed consistently and transparently, helping prevent disputes and providing a clear framework for decision-making.

New companies can adopt the standard Model Articles provided by Companies House or create custom Articles tailored to their structure, industry or shareholder arrangements.

Why Are Articles of Association Important?

Articles of Association are essential because they define how a company operates, how decisions are made and what rights directors and shareholders have. They provide clarity, prevent disputes and ensure the company complies with UK company law.

Without clear or up-to-date Articles:

• Disagreements between directors or shareholders are harder to resolve
• Key decisions may be delayed, challenged or invalid
• The company may unintentionally breach the Companies Act 2006
• Share transfers or investment negotiations can become complicated

With clear, well-drafted Articles:

• Roles, powers and responsibilities are transparent and enforceable
• Decision-making follows legally sound processes
• Shareholder rights and protections are clearly defined
• The company can operate efficiently and avoid costly disputes

A strong set of Articles protects the company’s governance, supports investment and gives directors confidence that they are acting within their authority.

What Do Articles of Association Cover?

Articles of Association set out the core rules a company must follow. While the exact wording can vary between businesses, most Articles include provisions covering:

Company Structure & Administration

• Company name, liability status and registered office rules
• How the company can amend its constitutional documents

Shares & Shareholders

• Classes of shares and the rights attached to them
• How new shares can be issued
• Rules for transferring, selling or redeeming shares
• Pre-emption rights and shareholder obligations

Directors & Decision-Making

• Appointment and removal of directors
• Directors’ powers, duties and authority
• How board decisions are made (meetings, written resolutions, voting)

Meetings & Voting Procedures

• Notice periods
• Quorum requirements
• Member voting rights and decision thresholds

Dividends & Profits

• How dividends are declared and distributed
• Rules around reserves and profit allocation

These areas form the operational backbone of the company, ensuring decisions are made fairly, transparently and in line with UK company law.

When Do You Need to Update Articles of Association?

Articles of Association can be amended at any time, as long as shareholders pass a special resolution (at least 75% approval). Companies often start with the standard Model Articles, but as the business grows, changes are usually needed to reflect new shareholders, investments or governance requirements.

You may need to update your Articles when:

1. Ownership or Share Structure Changes

• Creating new share classes (preference, non-voting or growth shares)
• Changing existing share rights
• Issuing shares to new investors
• Restructuring equity during funding rounds

2. Investors or Lenders Require Specific Protections

• VCs or angel investors often require custom Articles
• Reserved matters, drag-along / tag-along rules, consent rights
• Enhanced voting or dividend rights

3. Aligning with a Shareholder Agreement

If a shareholders’ agreement introduces rights not currently reflected in the Articles, they may become legally inconsistent. Updating the Articles avoids conflicts.

4. Governance or Director Powers Need Clarifying

• Adding or removing directors
• Setting clearer rules for decision-making
• Adjusting quorum or voting requirements
• Allowing or restricting written resolutions

5. Company Operations Evolve

• Introducing digital meetings or electronic communications
• Expanding business activities or objects
• Updating administrative procedures

6. Addressing Legal or Regulatory Changes

• Reflecting updates to the Companies Act 2006
• Modernising outdated clauses
• Fixing drafting issues inherited from Model Articles

Model Articles of Association (vs Custom Articles)

When a UK company is incorporated, it must adopt Articles of Association. Most businesses either use the standard Model Articles provided by Companies House or create custom (bespoke) Articles tailored to their ownership structure.

Model Articles are fine for simple companies, but many businesses eventually need the additional flexibility and shareholder protections that only bespoke Articles can offer.

Model Articles

Model Articles are the default option for all new UK companies. They provide:

✔ A fast, compliant setup that meets Companies Act 2006 requirements
✔ Clear, generic rules suitable for simple or single-director companies
✔ A low-maintenance structure with minimal drafting

However, Model Articles have limitations. They may not be suitable when a company has:

• Multiple shareholders
• External investors (angel, VC, private equity)
• Different classes of shares or voting rights
• Founders needing additional protections
• More complex governance or decision-making needs

Because they follow a “one-size-fits-all” structure, Model Articles can become restrictive as the company grows - particularly during fundraising, restructuring, or when disputes arise.

Custom (Bespoke) Articles

Custom Articles allow a company to tailor its governance to reflect how it actually operates. They can be drafted to:

• Add specific shareholder protections
• Create new or more complex share classes
• Strengthen founder rights
• Include investor-friendly provisions (drag-along, tag-along, anti-dilution)
• Clarify director powers and decision-making processes
• Add or refine pre-emption rights
• Restrict or control share transfers
• Align the Articles with a Shareholders’ Agreement

Bespoke Articles are commonly used when:

• Bringing in external investment
• Restructuring ownership
• Planning for growth or exit
• Forming a more sophisticated governance structure

They ensure the company’s core governing document genuinely matches its legal, operational and commercial needs - rather than relying solely on the statutory minimum.

Articles of Association vs Memorandum of Association

The Articles of Association and the Memorandum of Association are both essential company formation documents, but they serve completely different purposes.

The Memorandum records the company’s creation.
The Articles govern how it operates.

Memorandum of Association

The Memorandum is a historic document created only at the moment a company is formed. It confirms that the initial shareholders (the “subscribers”) agreed to form the company.

Key points:

• Created once during incorporation
• Cannot be changed or updated
• Lists the names of the original shareholders
• Acts as a permanent record of consent to form the company

After incorporation, the Memorandum plays no continuing role in how the company is run.

Articles of Association

The Articles of Association are the company’s ongoing rulebook. They set out how the business is governed day-to-day and can be amended by shareholders when the company grows or changes.

The Articles cover:

• Decision-making rules
• Director powers and responsibilities
• Shareholder rights and protections
• Issuing and transferring shares
• Meetings, voting and administrative processes

Unlike the Memorandum, the Articles remain active throughout the life of the company and can be updated via a shareholder resolution (usually 75% approval).

How to Create or Amend Articles of Association

Creating or updating Articles of Association involves two parts:

(1) following the legal process.

(2) choosing how the new Articles will be drafted - Model, amended, or fully bespoke.

Below is a clear breakdown of both:

The Steps to Create or Amend Articles of Association

Changing or adopting Articles follows a structured legal process under the Companies Act 2006:

Choose the type of Articles you want

• Keep the default Model Articles
• Amend the Model Articles
• Replace them entirely with custom (bespoke) Articles

Prepare the draft Articles
Include clauses that reflect your ownership, governance needs and any shareholder or investor requirements.

Pass a special resolution

A 75% shareholder vote is required to adopt new or amended Articles.
This can be done:

• at a general meeting, or
• by written resolution.

File the new Articles with Companies House

Submit:

• the updated Articles (PDF format)
• the special resolution (form CC04)

The change only becomes legally effective once filed.

Update internal company records

Keep the current Articles:

• At the registered office or SAIL address
• Available for shareholders and directors
• noted in your statutory books

These steps ensure the Articles are properly adopted, compliant and enforceable.

Ways to Draft Articles of Association

This section covers how you actually produce the document.

1. DIY Drafting

✔ Free
✔ Suitable only for very small, simple companies
✘ High risk of mistakes
✘ Often rejected by investors or banks
✘ Can conflict with company law without realising

2. Using a Template or Online Tool

✔ Low-cost
✔ Professionally structured wording
✔ Ideal for small–medium complexity
✔ Faster than solicitor drafting
✘ Still needs tailoring
✘ Must be formally adopted and filed to take effect

3. Paid Company Formation / Document Services

✔ Mid-range cost
✔ Provide usable templates
✔ Good for basic–moderate complexity
✘ Staff may not be legally qualified
✘ Quality varies significantly

4. Solicitor-Drafted Articles

✔ Best for complex ownership, investment rounds or disputes
✔ Tailored legal advice
✔ Ensures compatibility with a Shareholders’ Agreement
✘ Most expensive option (£300–£1,000+)

How Much Does It Cost to Draft Articles of Association?

The cost of drafting or updating Articles of Association depends on the company’s complexity, whether investors are involved, and whether you use Model Articles, templates, or full legal support. Simple companies can keep costs low, while growing or investor-backed businesses often require bespoke drafting.

Below are the typical price ranges:

Model Articles (Companies House Default)

Cost: Free.
Included when incorporating a new company.
Suitable for simple or single-director structures.
No custom clauses, protections or investor terms.

Online Templates / Formation Platforms

Cost: £50–£200.
Provides structured, solicitor-checked templates.
Faster and cheaper than a solicitor.
Suitable for small to medium complexity.
Still requires correct adoption and filing

Solicitor-Drafted or Reviewed Articles

Cost: £500–£1,500+.
Required for investment rounds, share classes, or complex governance.
Includes tailored clauses (drag/tag-along, pre-emption, restrictions, etc.).
Ensures compliance with the Companies Act and investor expectations.

These ranges reflect the most common routes businesses take — from basic Model Articles to fully bespoke governance documents created for scale, investment or restructuring.

Articles of Association - Template Example

The example below provides a simplified illustration of how Articles of Association are typically structured and the type of provisions they normally contain. This is for guidance only - official Articles must comply with the Companies Act 2006 and be tailored to your company's share structure, governance needs and any investor requirements.

ARTICLES OF ASSOCIATION
of
[Company Name]
Company Number: [Company Number]

Interpretation
These Articles are made under the Companies Act 2006. Expressions have the same meaning as in the Act unless otherwise stated.

Limited Liability
The liability of the shareholders is limited to the amount unpaid (if any) on their shares.

Share Capital and Share Rights

- The Company may issue shares with such rights and restrictions as determined by the Directors or by ordinary resolution.

- Shares may carry voting rights, dividend rights, pre-emption rights or other class-specific provisions.

Transfer of Shares

- Shares may be transferred in accordance with these Articles.

- The Directors may refuse a transfer in circumstances permitted by the Companies Act 2006.

Decision-Making by Shareholders

- Company decisions are made by ordinary or special resolution as set out in the Companies Act 2006.

- Written resolutions may be used except for matters requiring a meeting under the Act.

Directors and Their Powers

- The Directors are responsible for the management of the Company and may exercise all the powers of the Company unless restricted by the Articles or by statute.

- The Board may delegate powers to committees or individual Directors.

Appointment and Removal of Directors

- Directors may be appointed by the shareholders or by the Board.

- A Director may resign or be removed in accordance with the Companies Act 2006 and these Articles.

Directors’ Meetings and Quorum

- Board meetings require a quorum of [number] Directors.

- Decisions may be made by majority vote or unanimous written consent.

Dividends and Distributions

- Final dividends may be declared by shareholders on the recommendation of the Board.

- Interim dividends may be paid by the Board if justified by the Company’s financial position.

Records, Accounts and Notices

- The Company must maintain statutory registers, accounting records and give notices in accordance with the Companies Act 2006.

These Articles are adopted on [date] by the initial subscriber(s):

Subscriber 1:
Name: ____________________________
Signature: ________________________

Subscriber 2:
Name: ____________________________
Signature: ________________________

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Articles of Association FAQs

What are Articles of Association?

Articles of Association are the legal rulebook that governs how a company is run. They define director powers, shareholder rights, decision-making processes and internal administrative rules.

Are Articles of Association legally required?

Yes. Every UK company must have Articles of Association under the Companies Act 2006. Without them, a company cannot legally operate.

What’s the difference between Articles of Association and a Shareholders’ Agreement?

Articles are a public document filed at Companies House and apply to all members. A Shareholders’ Agreement is a private contract between shareholders that usually covers commercial arrangements not suitable for public filing.

Can Articles of Association be changed?

Yes. Companies can amend Articles at any time by passing a special resolution (75% shareholder approval) and filing the updated version with Companies House.

Do all companies use the Model Articles?

Many small or single-director companies use Model Articles.
However, companies with investors, multiple shareholders or more complex structures usually require bespoke Articles for added flexibility and protection.

Do Articles of Association need to be filed physically?

No. Articles are filed digitally when incorporating or updating a company via Companies House. The contents must meet legal requirements, but the filing itself is electronic.

Are electronic signatures valid on Articles?

Yes - Companies House accepts digitally signed resolutions and uploaded Articles, provided the documents meet the correct legal format.

Where can I find my company’s Articles of Association?

You can download the latest version free from the Companies House register. Companies should also keep an internal copy for directors and shareholders.

Do Articles override a Shareholders’ Agreement?

No. If the two documents conflict, the Articles usually take priority because they are the company’s constitutional document. Ideally, they should be aligned.

Do Articles override a Shareholders’ Agreement?

No. If the two documents conflict, the Articles usually take priority because they are the company’s constitutional document. Ideally, they should be aligned.

Can I write my own Articles of Association?

Yes - but drafting errors can cause future disputes or make the Articles unenforceable. Most companies use Model Articles, a solicitor-verified template or professional drafting.

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