Both a memorandum of association and articles of association are required for a company formed in the UK under the Companies Act 2006 and previous Companies Acts. The memorandum of association is the document that sets up the company and the articles of association set out how the company is run, governed and owned. The articles include the responsibilities and powers of the directors and the means by which the members exert control over the board of directors.
In this article we look at the purpose and content of these documents. For a practical take, elsewhere we explore what investors will look for in a company’s articles and how to change the articles. We also explain some enhancements you may want to make to the model articles.
Memorandum of association
The memorandum confirms that the subscribers wish to form a company under the Companies Act and agree to become its first members. In the case of a company that is to have a share capital, they undertake to subscribe for at least one share each.
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The memorandum of association must be in a prescribed form and must be authenticated and signed by each subscriber . It must be delivered to Companies House together with an application for registration of the company and the new company’s articles of association. Once registered, the memorandum of association becomes a public document that can be viewed by anyone.
Before the Companies Act 2006 came into force a company’s memorandum included provisions which now fall within the articles of association. This included any restrictions on what the company could do. For companies formed before 1 October 2009 these restrictions are now treated as being part of the articles and not the memorandum.
Articles of association
Purpose
The articles of association set out how the company is run, governed and owned. The articles can put restrictions on the company’s powers – which may be useful if shareholders want comfort that the directors will not pursue certain courses of action, at least without shareholder approval. By default, however, the Companies Act 2006 gives a company unlimited powers.
In addition to the articles, which are a public document, the shareholders may enter into a private shareholders’ agreement. This augments the articles in relation to the running, governance and ownership of the company.
Before the Companies Act 2006 came into force the memorandum of association had to state in an ‘objects clause’ the types of business and transactions that a company could enter into. This will still restrict the company’s powers as these limitations are now treated to be part of the articles. Companies founded before October 2009 should review their memorandum and articles for any changes needed, including the need to remove this objects clause. The removal of the objects clause is only effective if form CC04 is submitted to Companies House, together with the special resolution approving the amendment.
There are exceptions to the unlimited powers now given to companies. Charitable companies must state the charitable purposes that the company is restricted to. Similarly, community interest companies (CICs) must restrict the company to purposes that benefit the community.
Form
There is no set form for the articles, although there are certain provisions that need to be included in them. To assist with this there are model articles set out in the Companies (Model Articles) Regulations 2008, as amended, for the three most common types of company:
- private company limited by shares
- private company limited by guarantee
- public limited company.
The most up-to-date versions of the first two are available on our website. In addition, the Charity Commission has a set of model articles for charitable companies which can be used and the Community Interest Companies Regulator has model articles for community interest companies.
An extract from the Model Articles of Association for a company limited by shares
If the model articles are not being adopted then the company can either use amended model articles or its own bespoke articles. In either case the articles need to be sent to Companies House when applying to form the company so that they can be reviewed to ensure that they are acceptable. Where they are amended model articles, only the amending provisions need to be sent to Companies House for review. If there is a perceived problem with the articles they will need to be amended before the company can be formed.
For charitable companies the articles also need to be sent to the Charity Commission for approval. For community interest companies the articles are forwarded to the regulator by Companies House to be approved.
Content
The articles should cover, amongst other matters, the following:
- Liability of members
- Directors’ powers and responsibilities
- Directors’ meetings, voting, delegation to others and conflicts of interest
- Retaining records of directors’ decisions
- Appointment and removal of directors
- Shares, unless a limited by guarantee company:
> issuing shares
> different and their particulars
> share certificates
> share transfers - Dividends and other distributions to members
- Members’ decision making and attendance at general meetings
- Means of communication
- Use of the company seal, if applicable
- Directors’ indemnity and insurance.
Need enhanced articles of association?
Our professionally drafted articles of association offer various enhancements to the standard model articles, allowing you to have one, two or three share classes.
You can purchase these enhanced articles online for your new or existing company or when forming a company using Inform Direct.
Entrenched articles
Companies Act 2006, section 22 allows the articles to contain ‘provisions for entrenchment’. These are clauses that provide further requirements for changing specified provisions in the articles. For example, a greater percentage of shareholder approval may be needed than the usual 75% for a special resolution.
A notice must be given to the Registrar when an entrenched provision appears in a company’s articles upon incorporation (when the company is being formed). Form IN01 (application to register a company) contains a box to tick for this purpose. The Registrar must also be informed when an entrenchment provision is added after incorporation (form CC01) and when the articles are amended to remove an entrenchment provision (form CC02). Whenever a change is made to articles of association that carry restrictions to changing the articles such as provisions for entrenchment, a statement of compliance with those restrictions (form CC03) must be sent to the Registrar.
Reviewing and amending the articles
The articles can be amended. In another article we explain the process of changing the articles, with free template resolutions for the required special resolution. If a company changes its articles, other than to the model articles, a copy of the articles should be sent to Companies House within 15 days of the change for review. A copy of the amending resolution must also be sent within 15 days of being passed. You do not need to tell Companies House why you are changing the articles.
The directors and company secretary (if one is appointed) of a company should have a good working knowledge of the company’s constitutional documents, especially the articles. When managing the business of the company, they need to be comfortable that they are acting within the powers conferred by the articles and following the processes or other formalities laid down there.
It’s also sensible for the board to review the articles on a regular basis. As the company and its circumstances change, some existing clauses may no longer be useful or new provisions may be desirable. By reviewing and, where appropriate, updating the articles of association the company can achieve the most appropriate balance between the needs of the directors and members, giving the former the right powers to run the company while protecting the interests of its members.
All companies are required to maintain up to date company records. Inform Direct is the perfect tool to keep your company records up to date.
A previous version of this article was originally published on 15 February 2017. The most recent update was on 20 March 2023.
How can I get a hold of a copy of this form for a Company that I would like to also register in the Republic of Ireland?
Hi Daniel, the Inform Direct software solution and related articles such as this are specific to UK limited companies. For companies in the Republic of Ireland please contact the Companies Registration Office at http://www.cro.ie
This and other info on your site has been so clear helpful, thank you 🙂
Thank you the information helped me so much
Thanks for your article
Thanks for your information. I want to access my company MOU and articles of association online. How do I do it?
You should be able to access a copy for UK companies from the Companies House website https://beta.companieshouse.gov.uk/. This should have the latest version of the articles of association that the company has filed.
when a company adopts articles of association,does it mean the rules in the companies act can be avoided
No, the articles of association must comply with the Companies Act.
Where would all the subscribers sign both the MoA and the AoA? Is it just at the end of each document or after each page when talking about the AoA?
The subscribers just sign the memorandum of association.
Hi Sir i am from India and my company is not a partnership company what should i do and where to get this memorandum of Articles
As mentioned in the article the model articles of association for a UK company are available from the Companies House website. These model articles can then be amended if needed for the needs of the company provided that they still comply with the Companies Act 2006.
really interesting and fruitful
Could anyone advise if Companies House post out the articles etc when the company is incorporated? or are they for download only? Thanks
Julie, further to your question Companies House will not generally post out the articles and memorandum of association. You can as you mention download these from the Companies House beta site https://beta.companieshouse.gov.uk/ for any company.
Thank you for this article, its been really helpful. For organisations incorporated before 1st Oct 2009, should they update both their Articles of Association and the Memorandum of Association? If the Memorandum is just a list of people agreeing to set up a company, the original subscribers may no longer be involved or is it advised to complete with the current subscribers (in this case Trustees)?
Sarah, thank you for your comment. For companies incorporated before 1 October 2009 you should only need to update the articles of association. In any event, you should get legal advice on this before proceeding.
Thanks alot