Understanding the Company Memorandum and Articles of Association
In the UK, all companies must have a memorandum and articles of association. These documents are created during the company formation process and registered with Companies House.
The memorandum of association is a legal statement listing the names of the founding members (shareholders or guarantors), confirming their intention to incorporate the company and become members.
The articles of association outline the rules for how the company will operate. Companies can adopt the Model articles from Companies House or customize them to establish their own rules and regulations.
What is the memorandum of association?
The memorandum is a one-page document that the initial members of a limited company must sign. By doing so, they declare their intent to establish the company and become its members.
The format of this legal document cannot be modified before the company formation, and the names of the subscribers cannot be changed or removed after incorporation. This is a permanent document that will remain unchanged, even if original members leave or new members join the company.
During the company formation process, Companies House creates the memorandum and attaches it to the articles of association, which together become part of the registration application. As a public document, the memorandum is accessible online at Companies House. Therefore, all companies must maintain a copy of the memorandum at their registered office or SAIL address to ensure legal compliance and transparency.
What are articles of association?
The articles of association are a multi-page document that serves as the constitution of a limited company. This document functions as an internal rulebook, outlining how the company should be structured and managed, including:
- How decisions can and must be made
- The rights, duties, responsibilities, and liabilities of members
- The duties, responsibilities, and powers of directors
- Share capital, including the issuance and transfer of company shares
- Distribution of profits
- Procedures for appointing and removing directors
- Whether a company secretary is required
- All other administrative matters related to the company
The Companies Act 2006 prescribes Model articles, available from Companies House, to cater to different types of companies: private companies limited by shares, private companies limited by guarantee, and public limited companies (PLCs). Most companies adopt these default articles unless they choose to create their own.
These standard articles are straightforward and generally suitable for private limited companies that issue only ordinary shares, as well as some limited by guarantee companies and PLCs.Model articles are often a good option for small, basic companies, particularly those with just one director and shareholder, that do not require any specific provisions.
Bespoke articles are especially beneficial for companies with multiple share classes and several shareholders. By allowing customization, they can be tailored to fit the company’s specific objectives and the diverse rights of its members. Moreover, bespoke articles promote fairness, ensuring that all members are treated equitably in line with any shareholders’ agreements. Additionally, they provide flexibility for addressing complex ownership structures and resolving potential conflicts among shareholders.
If a company decides to modify the Model articles by adding, changing, or removing any provisions, it must submit a copy of the revised articles to Companies House as part of the incorporation process.
A company’s articles are publicly accessible and can be changed at any time after incorporation during a general meeting of its members. The company must also keep a copy of these articles at its registered office or SAIL address.
Can I create my own articles of association?
Yes, you can create your own bespoke articles and submit them with your application to Companies House. However, drafting articles can be complex, so it’s advisable to seek legal advice or assistance if you choose to create your own.
Can I change the memorandum and articles of association after company formation?
The memorandum is a permanent document that cannot be changed. While members may join or leave the company, with these changes needing to be updated in your company’s statutory register of members and on public record, the memorandum will always remain in its original form throughout the life of your company.
However, the articles of a limited company can be modified at any time after formation, unless entrenchment provisions have been included in the amended articles. Such provisions may prohibit changes or impose stricter requirements for approval.
If no restrictions are in place, the articles can be amended by a special resolution, which requires the approval of 75% of members’ votes. Members can cast their votes either at a general meeting or through a written resolution.
Once the changes are approved, a copy of the resolution along with the updated articles must be filed with Companies House within 15 days of the resolution.
How do I send my articles of association to Companies House?
If you register your company online using the Companies House Web Incorporation Service, you must adopt the Model articles. Companies House does not require a copy of these Model articles.
If you register your company using a paper application (Companies House form IN01), you can adopt Model or bespoke articles. You must submit the bespoke articles of association by post, along with your application form. If you use Model articles, you do not have to include a copy.
When you register your company online through Startxpress, we will automatically submit your articles of association, closely aligned with the Model articles, along with your application form. This is the fastest and simplest option for any type of company.
Note: The memorandum is provided by Companies House as part of the incorporation process.
Where can I get a copy of my company’s memorandum and articles of association?
You can download a copy of your memorandum and articles of association online from Companies House. If you register through Startxpress, we will provide you with these documents once your company has been incorporated.
Do you have any other questions?
So, the Memorandum of Association is a founding document that officially establishes a company, listing the initial shareholders and their agreement to form the company. On the other hand, the Articles of Association define the company’s internal rules, including how directors are appointed, shareholder rights, and procedures for meetings. Together, these documents guide how a company operates legally and structurally in the UK.
For more details, check out the Startxpress Help Center and Blog. If you need assistance, contact us at support@startxpress.io! We’re here to help make managing your business as smooth as possible.
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