How to Write the Articles of Association in UK

To complete their constitution process at Companies House, limited liability companies must draft and file their articles and memorandum of association. Therefore, in this article I explain how to write the articles of association in the UK.

What are the Articles of Association in the UK?

The articles of association are documents that contain the rules and regulations that regulate the internal operations of a corporation. In other words, they determine a series of business characteristics. In order to avoid possible confusion among the partners that could lead to not complying with the rules, its wording should be as clear as possible.

The founding members of the enterprise can write the articles of association. However, it is recommended that they have a lawyer or expert adviser in the field to assess them.

Alongside the memorandum of association, the directors must file the articles to the Companies House to complete the registration process. On another note, it is possible to check a company’s articles in the UK in the British Trade Register or on the corporation’s website.

Differences between the Memorandum and the Articles of Association in the UK

As I previously explained, the articles set out the rules that regulate a company. On the other hand, in the memorandum of association, the founding members agree on the establishment of a business. It contains the name of the enterprise, its date of incorporation, its legal structure, the names and signatures of its original shareholders and the type of liability.

If the owners complete the registration process online, it will not be necessary to write the memorandum of association, as it will be created automatically.

How to Write the Articles of Association in the UK?

Define the Legal Structure of the Company

The first step will be to define the legal structure that the business will adopt. On the one hand, since the sole traders and partnerships do not have to sign up with the Companies House, they do not need to draft their articles.

Secondly, registered businesses must reflect certain aspects that will depend on their nature. For example, private limited companies must have at least two directors. Every corporation must express the type of liability. Finally, they must state whether a company is limited by shares or by guarantee.

Models of Articles of Association

New registered enterprises can draft their articles using models that the Companies House provides. If necessary, a company can modify, add or delete some of its sections. This is done to express specific provisions or additional needs. In addition, a company could even write them from scratch if necessary. On this website you can check these models of articles of association.

Sections of the Articles of Association

The articles must gather certain information about the company. Some of the most common points it includes (but not the only ones) are.

Basic information of the company. In this block, you can check the denomination, the object of the business (its main economic activity), its registered office and the estimated duration of its exercises (usually indefinite).
Data on initial capital. Here, the articles specify the share capital (the joint funds that all shareholders provide), the number of shares and the methods for transferring them.
Organisational structure. Who are the directors and administrators of a business, and which are their roles.
Rules for calling General Meetings. Another points that are present in this section are the voting power of each share and the type of majority necessary to accept a resolution.
Forms of distributing profits among shareholders.
Process of dissolution of the company and liquidation of its assets and liabilities.

Change an Article after the Constitution of the Business

Directors can modify an article at any time. Therefore, it is necessary to pass a resolution by a majority of three quarters in the General Meeting of Shareholders. Upon approval, the enterprise must send a copy of the document attesting to the result to the Companies House within 15 days after the voting.

In ukstartcompany, you will find information about how to establish, register and operate companies with different legal structures and business activities in the UK.