In the UK, every company formed is required to have articles of association which are legally binding on the company and all of its members. The articles are the company rules and they’re designed to help ensure the company’s business runs as smoothly and efficiently as possible. They set out how decisions are taken by the members and may include a minimum number of directors as well as various other matters connected with the administration of the company.
The articles of association cannot contain rules that are against the law. Provided the members observe this general principle, they have complete freedom to choose which rules are included in the company’s articles. However, they may find it convenient to rely on model articles provided by Companies House. These can be used in their original form or amended as necessary. Some company formation agents also draft their own.
If a company has particular provisions they wish to include in their articles of association, the members can have their articles drafted specifically for their company; in this case, it is wise to obtain professional advice.
If you are interested in using the model articles provided by Companies House, these are available for private companies limited by shares, private companies limited by guarantee and public companies.
The model articles are set up in schedules 1-3 of ‘The Companies (Model Articles) Regulations 2008 (SI No. 3229)’.
Read our guide to other common terms you may encounter whilst forming a company