Articles of association

The articles of association are the provisions which regulate the affairs of the company.
If the objects (business activities) of the company are to be restricted, the permitted
activities will be set out in the articles. The articles also contain regulations about
shares and share rights, appointment and removal of directors and the mechanics of
calling and holding board and shareholders’ meetings, as well as other administrative
matters.

Our articles are drafted by Counsel and are designed to provide a clear, robust and
flexible constitution on which to base the company’s future business. If you would like
assistance with any specialist drafting to tailor the articles to your company’s specific
needs, please contact Helen Goose on 0117 918 1322.

Model articles explained
In the articles of association you will see references to the “Model Articles”. These are
the statutory model articles that apply to companies if they do not register articles on
incorporation. There are different models for different types of companies – private
limited by shares, private limited by guarantee and public limited companies. Our
articles adopt the model articles with modifications to give the company and its officers
broader powers and more guidance on certain aspects of the company’s administrative
affairs.

Optional additional articles

Transfer of shares
You need to think about what you want to happen if you or another shareholder wants
to sell your shares in the future. If you want to make special provision for this you need to
include a clause in your Articles of Association. Our standard articles state that
shares can only be transferred if the board approves the transfer, but subject to this,
shares can be transferred to any person.

Option 1 – Pre-emption rights on share transfers
Shares are offered to the other shareholders pro rata to their current holding.

Option 2 Unrestricted transfer to family members
Directors must register transfers of share to family members; all other transfers at
directors’ discretion.

Option 3 - Unrestricted transfer to family members; pre-emption on other
transfers.
Directors must register transfers to family members; all other transfers subject to preemption
rights in favour of the other shareholders prorate to their shareholdings.

Enhanced voting rights for directors
It is possible to reinforce the position of a director who is also a shareholder by giving
him or her sufficient votes per share to block a resolution to remove him or her from
office.

Associate directors
For management purposes it may be appropriate to create a class of associate
directors who are given additional status beyond that of an employee but are not
members of the board.

Chairman’s casting vote
Gives a chairman who is also a shareholder a casting vote in the event of an equality of
votes on any resolution at a general meeting.

If you have any further questions, please contact our Corporate Legal Services
team.

Trading activity explained
Your company will be formed with unrestricted objects, meaning that the company will be
able to carry out any lawful trade or business.

If you require a company with specific objects, we can help. Please contact our
formations team for more information.