All registered companies must have articles of association. A company must register its articles of association (and any subsequent changes to those articles) with Companies House unless the company has opted to adopt the Model articles of association.
Memorandum of Association
The memorandum of association is a document stating that the subscribers wish to form a company under the Companies Act 2006 and agree to become members of the company and, in the case of a company with a share capital, to take at least one share each. The memorandum must state the name of each subscriber and their individual authentication. The memorandum is essentially a “snapshot” of part of the company’s constitution at the point of registration and will have no continuing relevance. It cannot be amended or updated during the life of the company.
The model articles apply automatically to companies that choose not to modify or exclude the provisions of the relevant model articles in its registered articles and exist for:
- Private companies limited by shares;
- Private companies limited by guarantee; and
- Public companies.
Companies are able to make a conscious choice to include in their articles of association provisions of the model articles, with or without modification.
Table A, the default set of articles for limited companies incorporated before 1 October 2009, continues to apply to such companies, unless and until the model articles are specifically adopted.
Changing the Articles
The articles of association may be altered by special resolution. The company must send a copy of any amended articles to Companies House within 15 days of the amendment taking effect. Failure to comply amounts to an offence committed by the company and every defaulting officer, punishable by a fine. Companies House may give notice to the company requiring it to rectify the breach within 28 days. Where the company complies with the notice, the company will avoid prosecution for its initial failure to comply. If the company does not comply, it will be liable to a civil penalty of £200, recoverable by the Registrar as a debt, in addition to any criminal penalty that may be imposed.
A member is not bound by any alterations made to the articles subsequent to him becoming a member, if the alteration has the effect of increasing his liability to the company or requires him to take more shares. A member may give his written consent to the alteration and is then bound by it.