Top 6 FAQs about creating company articles that are tailored to your business

1. What are articles of association?

Articles of association, sometimes referred to as "company articles," are the formal set of rules that govern a company's operations and management. It is a publicly accessible document that all limited companies are required to have. A company's articles ensure that both directors and shareholders adhere to specific guidelines when running the company.

All company articles must be organised into numbered sections, each detailing various aspects of the company's internal governance. They outline crucial policies regarding the appointment of directors, the conduct of board meetings, and administrative procedures. A company's articles may also contain detailed information on share management, shareholder rights, and in some cases, other bespoke rules that are specific to the company.

You can find out more about a company's articles by reading this comprehensive guide.

2. Where are a company's articles of association kept?

In the UK, a company's articles are filed with Companies House. This public register allows anyone to access the company articles, providing transparency regarding its governance and internal rules. To view a company's articles, you can search for the company on the Companies House website or request copies directly from them.

3. What are the "Model Articles"?

The Model Articles are a standardised set of articles prescribed by the Companies Act 2006. These articles are provided by Companies House and can be used by new companies when they are first incorporated. Key provisions in the Model Articles include:

• The appointment, removal and powers of the company's directors;

• How shareholders make decisions and hold meetings;

• Issuing and transfer of shares;

• How dividends are distributed; and

• The winding up of the company.

The Model Articles are designed to be simple and generic. Companies can choose to use the Model Articles as they are or modify them to better fit their specific needs. While the use of Model Articles is not mandatory, if a company does not register its own articles, the Model Articles automatically apply by default. Model Articles templates are readily available from Companies House on the UK government website.

4. Can I write my own bespoke company articles?

Yes, although the Model Articles are suitable for many companies, their "one-size-fits-all" approach may not be ideal for every business. If you wish to deviate from the standardised rules of the Model Articles, you have the option to create bespoke articles specifically tailored to your company’s purpose and internal operations. Should the Model Articles no longer meet your company's evolving needs or if you are setting up a new company where the Model Articles are not suitable, it is advisable to either amend your existing articles or develop bespoke articles from the outset. This ensures that the articles are well-aligned with your company's specific requirements and operational goals.

You can create your own company articles that are tailored to your business by using Docue's template.

5. What are the benefits of tailoring my company's articles to my specific business needs?

Although the Model Articles will be suitable for a vast number of companies, there are several benefits to creating articles that are bespoke to your company, such as:

• Alignment with business objectives: Bespoke articles allow companies to customise their governance structure to align with their unique business purpose, goals and operations. This ensures that the provisions regarding shareholder rights, director responsibilities, and decision-making processes support the company’s strategic vision and operational requirements.

• Flexibility: Unlike the standardised framework of model articles, bespoke articles provide the flexibility to adapt to future growth, changes in ownership, and the management of the company. This adaptability helps companies respond quickly to market changes and strategic shifts without being constrained by rigid governance rules.

• Clarity: Custom articles provide clear guidelines on rights, obligations, and decision-making procedures, reducing ambiguity and potential conflicts among stakeholders. Having bespoke articles with clear guidelines instils confidence among investors, directors, and other stakeholders, enhancing corporate transparency and accountability.

• More control over share rights: The Model Articles assume that the company has a single class of shares with equal rights. Bespoke articles, however, can establish multiple share classes with different rights and regulations, including distinct rules for dividend distribution and voting rights. For example, pre-emption rights give existing shareholders the first opportunity to purchase new shares before they are offered to outsiders, and the Model Articles automatically include these rights for new issues of ordinary shares. However, the Model Articles do not grant pre-emption rights for share transfers, allowing shareholders to transfer shares freely at any price to third parties. To include additional share classes or new share-related rules, bespoke articles must explicitly outline these provisions.

  If there are certain topics that the company would prefer to keep private, you agree to these rules using a shareholders' agreement. This is a private document between the shareholders and the company. A company's articles typically do not cover issues like how to handle disagreements among shareholders. If a disagreement arises, having a set procedure for resolving disputes in a shareholders' agreement makes it easier to address. You can find out more about the differences between shareholders' agreements and company articles by clicking here,

6. Can company articles be amended after they are filed, and if so, how?

Yes, a company's articles can be amended after filing. This typically involves passing a special resolution, requiring at least 75% of eligible shareholders to vote in favour of the changes. For limited companies, this can be done through a written resolution or at a general meeting. Once approved, the updated articles must be submitted to Companies House within 15 days where they will replace the previous company articles.

For more detailed guidance on how to amend your company's articles, read this blog.

How to create your own bespoke company articles

Creating a bespoke set of company articles of association can be straightforward with Docue’s automated template. Our platform provides comprehensive guidance to help you customise your articles to reflect your specific business requirements. Simply answer the questions, using the handy guidance notes if you get stuck along the way, and you’ll have a bespoke set of company articles that are ready to use in minutes.

You can find Docue's company articles template here.

Sign up to Docue today to use our template to create your own company articles.