Articles of association

The articles are the document most owners sign once, at formation, and then file away. They are often taken from a model with a few blanks filled in, and nobody reads them again until a sale, a new shareholder or a falling-out raises the question of what the company actually allows. By then the answer is already written down, and it is the version on the public record that banks, buyers and courts will rely on.

Articles of association are therefore worth drafting for the company as it is and as it may become, and worth reviewing whenever the business changes shape. They sit where company law meets private choice, and they touch:

• the rules on what the articles must contain, and on what they may settle by choice;
• the rules on the company’s object, and on commitments made outside it;
• the rules on approval clauses and other limits the articles may place on who becomes a shareholder;
• the rules on how profit is allocated, and on the conditions a distribution must meet;
• the rules on internal regulations kept alongside the articles, and on what may be moved into them;
• the rules on amending the articles — the majority required, the formalities and the moment a change takes effect;
• the rules on filing and publishing the articles, and on keeping a consolidated version up to date;
• the rules on what happens when the articles and a shareholders’ agreement point in different directions.

Our lawyers can support you with this.