What is a Memorandum & Article of Association? by Future Formations

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WHAT IS A MEMORANDUM & ARTICLE OF ASSOCIATION? WWW.FUTUREFORMATIONS.CO.UK

Under Companies Act 2006 and previous Companies Acts both Memorandum and Articles of Association are required when forming company in the UK. Memorandum & Article of Association are split into 2 parts and each corresponds to different aspects of the company. Memorandum of Association shows you how the company was set, whereas Articles of Association set out how the company is run, owned and governed by the members. The articles will include the powers and responsibilities of the directors in the company as well as conveying the rules which the members exercise control over the board of directors. When registering your new company you don't have to write your own Memorandum of Association as that will be done automatically by Companies House with the information you have provided. For the Articles of Association you can use a standard template which is called "model articles" or you can write your own and upload it during the registration. What information you need to include in Memorandum of Association?

registered company name whether the company is limited by shares or guarantee date of subscription the name of each subscriber act which the company is incorporated under (the 2006 Act)

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What information you need to include in Articles of Association?

While there is no standard format for the company's Articles of Association they must comply with the 2006 Act, therefore certain elements should be included to govern the company's regulation. To make it easier for the new business, The Companies (Model Articles) Regulations 2008 set out model articles for the most common types of company, which are Limited By Shares (LTD), Limited By Guarantee (LBG) and Public Limited Company (PLC). If, at the time of the incorporation with Companies House bespoke articles are not filled out, the applicable model articles will be used instead. For example, the model articles for businesses limited by shares are organised into five sections: 1. shareholders liabilities 2. appointment of directors, his powers and responsibilities, meetings and decisionmaking 3. administrative arrangements 4. shares and distributions 5. decision-making by shareholders Although the Model Articles are sufficient for most of the newly formed businesses, they are not mandatory and can be altered and tailored to meet a company's specific needs at any time. Only the modified articles must be lodged with Companies House if they are changed. Only the modified articles must be filled with Companies House if they are changed.

Can you change the Memorandum Of Articles after the incorporation of the company?

The only thing that you can change in your Memorandum of Articles is the name of your company. The other elements such as the incorporation date, the Act under which your company was incorporated, the names of the subscribers, at the time of signing the Memorandum, and if your company is LTD or LBG, that cannot be changed.

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Can you change the Articles of Association after the incorporation of the company?

Yes, the Articles can be changed at anytime, but there is a condition to be fulfilled. To alter the articles, the company's shareholders or members must adopt a special resolution with at least 75% of all eligible members voting in favour of the resolution. Once the new articles have been agreed upon, a copy of them, as well as a copy of the members' resolution, must be filed with Companies House. It's critical to be able to amend and adapt articles as businesses change and develop over time to ensure they best reflect the needs of the company. To ensure that such adjustments comply with current company legislation, you should always get legal advice.

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