Memorandum and Articles of Association

Every limited company in the UK is built upon a legal foundation composed of two primary documents: the Memorandum of Association and the Articles of Association. Together, these form the "constitution" of your business. While they are often mentioned in the same breath, they serve very different purposes.

In this detailed guide, we will break down the legalities, the practicalities of obtaining copies, and the strategic importance of tailoring these documents to your business needs.

Are the Memorandum and Articles of Association a Legal Requirement?

Yes. Under the Companies Act 2006, it is a strict legal requirement for every UK company to have both a memorandum and articles of association. These documents must be submitted to Companies House during the incorporation process. Without them, a company cannot be legally formed.

These governing documents serve as a contract between the company and its members (shareholders or guarantors), ensuring that everyone understands the rules of the game from day one.

Understanding the Memorandum of Association

The Memorandum of Association is a snapshot in time. It is a legal statement signed by the "subscribers" (the founding members) confirming their intention to form a company and, in the case of a company limited by shares, their agreement to take at least one share each.

What Information Does It Contain?

In the modern era, the memorandum is much simpler than it used to be. It typically includes:

The Company Name.

The Date of Incorporation.

The Type of Company (e.g., Private Limited by Shares).

The Act under which it is registered (Companies Act 2006).

The Names and Signatures of all original subscribers.

Can the Memorandum Be Amended?

No. This is a common misconception. Because the memorandum is a historical record of who founded the company on a specific date, it cannot be altered. Even if all original shareholders sell their stakes and leave the business, their names remain on the original memorandum forever. It serves as a birth certificate for the business—you cannot change who was there at the start.

Understanding the Articles of Association

If the memorandum is the birth certificate, the Articles of Association are the rulebook. This document is far more extensive and dictates how the company is managed on a daily basis.

The Scope of the Articles

The articles act as a blueprint for internal governance. They cover several critical areas:

Director Powers: What directors can and cannot do without shareholder approval.

Decision Making: How board meetings and general meetings are conducted.

Shareholder Rights: Voting rights, dividend entitlements, and what happens to shares if a member dies or leaves.

Administrative Issues: Appointment of a company secretary, how notices are sent, and how records are kept.

Liability: Confirmation of the limited liability of the members.

Model Articles vs. Bespoke Articles

When you form a company, you have two main choices regarding your articles:

The Model Articles

These are "off-the-shelf" rules provided by the government. They are designed to be fair and balanced for the average small business.

Pros: Cost-effective, simple, and widely understood by banks and investors.

Cons: Not suitable for businesses with complex share structures or those needing specific protections for minority shareholders.

Bespoke (Tailored) Articles

For businesses with multiple share classes, complex investment deals, or specific family-run requirements, bespoke articles are essential.

When to use them: If you have "Alphabet Shares" (Class A, Class B, etc.), specific "Drag-along" or "Tag-along" rights, or unique requirements for director quorums.

How to Amend the Articles of Association

Unlike the memorandum, the articles are a "living document." As your company grows, the original rules might become restrictive.

The Amendment Process

Agreement: A proposal to change the articles is usually made by the directors.

Special Resolution: To pass the change, you must obtain a 75% majority vote from the shareholders. This can be done via a written resolution or at a general meeting.

Filing: Once the special resolution is passed, you must file a copy of the new articles and the resolution with Companies House within 15 days.

Note: Some companies have "entrenched" provisions. These are specific rules that require an even higher threshold (such as 95% or 100% agreement) to change, often used to protect the interests of a specific founder.

How to Obtain a Copy of Your Documents

If you have lost your original documents or need to see the articles of another company (for example, before a merger), the process is straightforward.

Companies House Service: Most documents are available for free via the Companies House online search service. You simply enter the company name or number, go to the "Filing History" tab, and look for the "Incorporation" documents or "Notification of Change of Constitution."

Registered Office: Legally, every company must keep a copy of its memorandum and articles at its Registered Office or SAIL (Single Alternative Inspection Location) address.

Compliance and Record Keeping

It is a legal requirement to keep these documents accessible. If you move your records to a SAIL address, you must notify Companies House using Form AD02 and AD03. Failure to maintain these records or keep them updated can lead to fines and can complicate matters during a "due diligence" process if you ever decide to sell the business.

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What Professionals Often Want to Know

1. Can I have a company with only a Memorandum?

No, both documents are legally required for incorporation.

2. What happens if I don't file my amended Articles?

You may face a fine, and the changes may not be legally enforceable against third parties until they are filed.

3. Do the Articles mention the shareholders' names?

Usually, no. While the Memorandum lists the original subscribers, the Articles focus on the rules. Current shareholders are listed in the "Register of Members."

4. Can I use Model Articles for a PLC?

Yes, there are specific Model Articles designed specifically for Public Limited Companies.

5. What is an 'Objects Clause'?

In the past, companies had to state their specific purpose (objects). Today, most companies have "unrestricted objects," meaning they can engage in any legal business activity.

6. Is a Shareholders' Agreement the same as Articles?

No. Articles are a public document. A Shareholders' Agreement is a private contract that can contain more confidential details.

7. Who signs the Memorandum?

Only the founding members (subscribers) at the time of formation.

8. Can a director change the Articles alone?

No, changes require a 75% majority vote from the shareholders (a special resolution).

9. Where can I find my Company Number?

It is listed on your Certificate of Incorporation and at the top of your Memorandum.

10. Do I need a lawyer to write my Articles?

Not for Model Articles, but legal advice is highly recommended for bespoke articles to ensure they are legally sound.

11. Can I revert from bespoke articles back to Model Articles?

Yes, by passing a special resolution and filing the change with Companies House.

12. Are the Articles of Association public?

Yes, they are a public document available for anyone to view on the Companies House register.

13. What is a 'Subscriber'?

A subscriber is a person or entity that "subscribes" their name to the memorandum to form the company.

14. What if there is a conflict between the Articles and a Shareholders' Agreement?

Usually, the Shareholders' Agreement will contain a "supremacy clause" stating that its terms prevail over the Articles in the event of a conflict between the parties.

15. Do I need to update my Articles if I change my company name?

No, a name change is a separate process, although you should ensure your internal records reflect the new name.

Disclaimer: The information provided in this article is for general informational and research purposes only. Company details, features, services, and market positions may change over time. Readers are advised to visit official company websites and conduct independent research before making any business decisions or purchasing services.