Setting up a company – what are Model Articles of Association?

When incorporating a new UK private limited company, directors must register Articles of Association with Companies House. These Articles set out the company’s internal governance ‘rule book’. Here we explain what the Model Articles contain, and answer some common contractor FAQs.

What Are Model Articles of Association?

Model Articles of Association provide a standardised set of articles that companies can adopt on incorporation. They are a model framework drafted by the Department for Business, Energy & Industrial Strategy (BEIS).

The Companies (Model Articles) Regulations 2008 outline Model Articles for various company types including private limited companies. Adopting Model Articles means a company does not need to formulate bespoke articles.

Rather than drafting new Articles from scratch (at some expense), most companies adopt the Model Articles of Association provided by Companies House.

Model Articles provide sensible default rules covering company matters like share allotment, director appointments, meetings, remuneration and the powers of directors and shareholders. They reflect the latest company law and corporate governance best practice.

Some useful links

• You can download a copy of the latest Model Articles here
• Read our comprehensive guide to setting up a limited company

Adopting Model Articles

When incorporating a private limited company, directors actively choose to adopt Model Articles rather than drafting unique Articles. This is done on the Form IN01 sent to Companies House during incorporation. Almost all incorporations are done online these days, so this is simply a case of clicking a box to confirm.

Clearly, if your accountant or a formations company is setting up the company for you, they will usually assume that you’ll use Model Artices, unless you specify otherwise.

The Model Articles are treated as being incorporated into the company’s own Articles of Association. Companies can choose to modify or supplement Model Articles later if desired, for example to add specific provisions around share transfers.

Commonly Asked Questions

Company directors often have questions around how Model Articles function in practice. Some typical FAQs include:

Can we change the Model Articles later on?

Yes, a company can actively alter or add completely new provisions to the Model Articles after incorporation. This is done by the directors putting forward resolutions to change the Articles, which shareholders then approve by special resolution (75% vote in favor). Amendments can relate to matters like share transfers, director authority, new share classes etc. However, companies cannot remove any mandatory articles required by company law.

Do Model Articles cover shareholder meetings?

Yes, the Model Articles contain detailed provisions relating to shareholder meetings. This includes articles on calling and convening general meetings, minimum notice periods, voting procedures, proxies, ordinary resolutions (50% pass rate) and special resolutions (75% pass rate). However, companies can modify these based on their preferences, for example requiring a higher majority for certain resolutions or allowing virtual-only meetings.

Are Model Articles legally binding?

Absolutely – the Model Articles have the same legally binding effect as bespoke Articles once officially adopted upon incorporation. They constitute a binding contractual agreement between the company and its shareholders. The company and its officers must actively comply with provisions in the Model Articles around matters like dividends, director remuneration and company records.

Can we adopt amended Model Articles?

Yes – Companies House periodically publishes updated amended versions of the Model Articles. When going through the incorporation process, company founders can choose to adopt the latest ‘amended’ Model Articles. These will reflect recent legal/regulatory changes not covered in older Model Articles. Actively selecting the current amended Model Articles ensures your company’s articles are fully up-to-date.

How do Model Articles benefit small limited companies?

For small companies, drafting bespoke articles with solicitors can be time-consuming and costly. Adopting Model Articles saves new private companies substantial time and legal fees, providing an off-the-shelf articles framework. The Model Articles suit most routine company matters for small firms. However, larger companies may require more customized articles.

Do larger companies also use Model Articles?

The vast majority of private limited companies in the UK actively adopt Model Articles rather than drafting their own. Even many larger companies use the Model Articles as an initial base, then build on them with legal advice where needed to address specific issues.

Unless your company has unique circumstances requiring bespoke articles, you can typically adopt the standardised Model Articles during incorporation.

Download a copy of the latest Model Articles

There are three versions of Model Articles of Association, for companies formed on or after 28th April 2013:

• Model articles for private companies (limited by shares)
• Model articles for private companies (limited by guarantee)
• Model articles for public companies