When approaching a corporate lawyer with questions about how the law applies to your company, it is common to hear some variation of the answer: \u201cIt depends on your company\u2019s articles of association.\u201d This article will explain the importance of articles of association for your company and the terms most articles contain. It will also discuss how articles can differ between companies and how to look up a company\u2019s articles of association. <\/p>\n\n\n\n
All companies must have constitutions so that the three key stakeholders \u2014 shareholders, directors, and the company itself \u2014 know what each party\u2019s rights and obligations to the others are. The articles of association (often simply called \u2018the articles\u2019) will likely specify most of these rights. The articles of association are a company\u2019s most important constitutional document. <\/p>\n\n\n\n
You can think of your company\u2019s articles as an internal rulebook that sets out how the company is run. <\/p>\n<\/div>\n\n\n\n
Companies are complex creatures because there are multiple stakeholders whose interests can diverge in various ways. For instance, shareholders are the ultimate owners of a company, and most want some degree of influence over their investment. However, they may not want to make the day-to-day decisions. Nor would it be practical for directors to obtain the consent of shareholders for every decision they make. <\/p>\n\n\n\n
The articles set out the precise balance of power between shareholders and directors. <\/p>\n\n\n\n
Articles are adopted at the point the company is incorporated. However, there are mechanisms for changing them or replacing them with an entirely new set of articles. <\/p>\n\n\n\n
A company’s memorandum of association is a distinct document with a different purpose from its articles of association. Unlike a company’s articles, the memorandum is not a fundamental constitutional document. <\/p>\n\n\n\n
Instead, a memorandum is used to confirm that individuals wish to form a company and agree to become the company’s first members and usually its initial shareholders. This document must then be delivered to the Companies House<\/a> so as to register the company, and it must also include the company’s articles of association (alongside a registration document<\/a>).<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n