If you own or otherwise manage a company, you probably know that the articles of association act like the company’s rulebook. The articles of association, or articles, primarily lay down the rules directors must follow when managing the company. Given the fundamental importance of the articles, companies may, from time to time, wish to change their articles to better reflect their evolving needs and circumstances. This article will discuss the general procedure for changing your company\u2019s articles of association and specific relevant considerations.<\/p>\n\n\n\n
It is important to note that the articles of association are distinct from the memorandum of association. While the memorandum historically contained important information about the company\u2019s constitution, since the Companies Act 2006<\/em>, its role has been significantly reduced. For companies formed on or after 1 October 2009<\/em>, the memorandum serves only as evidence of the founders\u2019 intention to form a company and cannot be amended.<\/p>\n<\/div>\n\n\n\n All companies must have articles of association. Articles of association come in three main forms, including:<\/p>\n\n\n\n Each of these forms serves different purposes and can be suitable for different types of companies depending on their specific needs and circumstances.<\/p>\n<\/div>\n\n\n\n The model articles of association<\/a> are generic articles of association that apply in default of a company choosing to adopt bespoke articles or otherwise amend the model articles. They are designed to suit most companies, especially small ones. <\/p>\n\n\n\n The model articles are prescribed by the Companies (Model Articles) Regulations 2008 and are available for private companies limited by shares, private companies limited by guarantee, and public companies.<\/p>\n<\/div>\n\n\n\n Alternatively, companies may wish to amend certain of the model articles to suit their purposes. For instance, many companies disapprove of Model Article 14, which limits the directors\u2019 ability to vote on matters in which they may have a conflict of interest. Where a company broadly has the model articles but has made minor amendments or variations, these are amended articles of association. <\/p>\n\n\n\n Finally, larger companies and companies incorporated with the help of a law firm may adopt bespoke articles suited to their own particular needs and objectives.<\/p>\n\n\n\n Some common reasons for adopting bespoke articles include:<\/p>\n\n\n\n Suppose you find a term in the articles that prohibits your company or its directors from undertaking specific actions as the company otherwise wishes. In that case, you may amend the articles. Again, Model Article 14 is an excellent example of this. In its unamended state, any director with any interest in a particular matter put to the board is not eligible to vote unless<\/em> they obtain the consent of the shareholders through an ordinary resolution. <\/p>\n\n\n\n In practice, this is a cumbersome restraint on the directors, especially for small companies where directors and shareholders are the same. Therefore, all the directors\/shareholders (being the same) may choose to amend the articles to disapply Model Article 14. <\/p>\n\n\n\n Likewise, you can implement a bespoke rule in your articles. For instance, if you want to create a new class of shares<\/a> with special rights attached to them, you typically need to amend your articles to this effect.<\/p>\n<\/div>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nWhat are Articles of Association?\u00a0<\/h2>\n\n\n\n
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Unamended Model Articles of Association<\/h3>\n\n\n\n
Amended Model Articles of Association<\/h3>\n\n\n\n
Bespoke Articles of Association<\/h3>\n\n\n\n
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When Should I Change My Company\u2019s Articles?<\/h2>\n\n\n\n