A simple guide to amending your company's articles of association

What are a company’s articles of association?

Articles of association are a company’s written rules that outline how the company will be run, and the rights attached to its shares. They are an essential document that every limited company in the UK must have to govern its internal affairs.

The articles detail the responsibilities of directors, the rights of shareholders, and the procedures for making important decisions within the company. You can find out more about articles of association and what should be included in them in this comprehensive guide.

As your business grows, it may be necessary to amend these articles to align with the company's current needs and objectives.

Why amend your company's articles of association?

There are several reasons why you might need to amend your company articles of association:

1. Change in business structures or strategy: As your business grows, you may need to update share structures to accommodate new investors and rights attached to shares, or to update decision-making processes.

2. Regulatory compliance: New laws or regulations might require updates to your articles to ensure legal compliance.

3. Corporate changes: Changes such as re-registering your company status, aligning with a parent company, or changing the company name require corresponding changes in the articles.

4. B Corp Certification requirements: Companies seeking to achieve a B Corp certification must, among several other requirements, update their articles of association to include wording that demonstrates that the company’s purpose is dedicated to creating a positive impact on society and the environment. For more information about Certified B Corporations, check out B Lab’s website.

Company articles of association vs. shareholders' agreement

Before proceeding with amendments, it's important to distinguish between company articles of association and a shareholders' agreement:

• Articles of association: This is a public document that must be filed with Companies House.

• Shareholders' agreement: A private contract between shareholders detailing specific arrangements not covered in the articles. Unlike a company’s articles of associations, there are no prescribed requirements required by company law, so the shareholders can include any agreed terms in this document confidentially.

This guide focuses on amending your company articles of association. If you're looking for a template to create your own bespoke articles, click here.

What is the procedure to amend a company’s articles of association?

Amending a company's articles of association will typically involve the passing of a special resolution, which requires at least 75% approval from voting shareholders. This can be done through a written resolution or at a general meeting.

Amending articles with a written resolution

A written resolution is a document that outlines a company decision (known as a resolution). This document can be circulated to the shareholders and directors of a company, who can approve the written resolution by signing and returning it to cast their vote.

Written resolutions are typically used when shareholders and directors of the company are unable to meet in person for any reason. It’s an alternative way to vote on company matters without needing to be physically present at a meeting.

For private companies, a written resolution is a straightforward way to amend articles. Follow these steps:

1. Prepare the documents: draft the new articles and a written resolution outlining the proposed changes. You can use our written resolution template to ensure all necessary details are included.

2. Circulate the resolution: send the the written resolution proposing to amend the articles must be sent to all shareholders along with a copy of the new articles.

3. Shareholder approval: a written resolution to amend the articles of association requires approval by at least 75% of the votes cast by eligible shareholders. Once the threshold has been met, the written resolution will be approved.

4. Submit to Companies House: send a copy of the new articles and the written resolution to Companies House within 15 days of the resolution being passed.

Please note, public companies cannot use the written resolution procedure and must hold a general meeting in order to approve a resolution.

Amending articles by passing a special resolution

If you would prefer to hold a meeting and vote on company matters face-to-face, you can amend your company's articles of association at a general meeting by following these steps:

1. Hold a board meeting: the directors of the company must hold a board meeting in accordance with the company's articles of association to discuss and prepare the resolution. The directors will then agree to call a general meeting with the shareholders of the company. You can find a copy of Docue's dynamic board minutes template here.

2. Call a general meeting: send a notice to call the meeting at least 14 days in advance. It's important to include all the necessary details, such as the time, date, location, and the proposed changes.

3. Hold the general meeting: The shareholders will discuss the proposed changes in the general meeting and conduct a vote. The special resolution is passed if 75% or more of the votes are in favour.

4. Submit to Companies House: as with a written resolution, you must send a copy of the new articles and special resolution to Companies House within 15 days of the resolution being passed.

How to draft your company’s articles of association using Docue’s dynamic template

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.

Creating your own articles can be a complex process, as the Companies Act 2006 contains specific requirements that your company’s articles of association must comply with. However, Docue’s lawyer-drafted guidance notes are there to guide you through the process. Simply click through the intelligent tick box options and fill in the text box answers in the template, and you’ll have a comprehensive, tailored, and ready-to-use document to use in no time.

Sign up with Docue today and create your company's articles of association at the click of a button.