Articles of Association: established business single investor

Articles of Association to be adopted at closing of an investment in an established business by a single investor. Intended to accompany the Shareholders Agreement, these Articles balance the rights of the investor with the rights of the founders.

for an investment transaction by a single investor in an established business
as the new Articles of Association of the company to be adopted at closing
in conjunction with either the combined Investment & Shareholders Agreement or Shareholders Agreement see
- Investment and Shareholders Agreement – established business single investor
- Shareholders Agreement – established business single investor

What are the key features?

form of new Articles of Association for the company
amendments and additions to the Companies Act 2006 Model Articles
pre-emption rights on the allotment of new shares, with exceptions for employee share option grants
regulations governing the transfer of shares, including:
- permitted transfers to defined classes of permitted transferees
- pre-emption rights on the transfer of shares to third parties
- compulsory transfer provisions for founders and employee shareholders
- tag-along and drag-along rights, including investor protection against being required to sell its shares
regulation of shareholder meetings, including investor presence required for quorum
investor and other shareholder rights to appoint a director and investor’s director to be present for a quorate board meeting

What other documents are available?

For Articles of Association for an investment in a start-up business by a single investor, see

Articles of Association – start up business single investor

For Articles of Association for investment by multiple investors, see

Description

When do I use this document?

as an advance subscription agreement between the company and a single investor
where the conversion price will be calculated as a percentage discount to the issue price for shares in the qualified investment round
if agreed, where there is an agreed valuation cap on the company’s valuation

What are the key features?

advance subscription terms and payment
conversion on the occurrence of defined events, including a qualifying financing round, the sale of the company or on a longstop date
conversion price on a qualified financing round to be at an agreed percentage discount to the qualified financing round share price
if agreed, a cap on the valuation of the company for the purpose of calculating the conversion price
warranties regarding the investor’s compliance with Financial Services and Markets Act 2000 regime regarding financial promotions

What else do I need to know?

For detailed discussion regarding the purpose of advance subscription agreements and their benefits and disadvantages for investors and the company, click here.

Negotiating points

Prior to entering into this ASA, the parties will need to consider and agree:

discount rate: the discounted price per share (expressed as a percentage) at which the ASA investor will receive shares in the qualified financing round
valuation cap: if agreed, the cap on the valuation of the company for the purpose of calculating the price at which the advance subscription will convert into shares on a qualified investment round
default valuation: the default valuation of the company which will be used to calculate the conversion price of the advance subscription in circumstances where conversion occurs on the agreed longstop date or the company’s insolvency
longstop date: the longstop date on which (and in the absence of a prior qualifying financing round) the ASA will automatically convert into shares
qualified financing round: the minimum amount of funding which the company must raise before that funding round will count as the qualified financing round under the ASA which results in the conversion of the advance subscription into shares
subscription amount: the amount of the investor’s advance subscription

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

£50.00 exc VAT

Updated by a lawyer on 30/06/2025

Updated By a lawyer on 05/04/2023

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Articles of Association: established business single investor

When do I use this document?

What are the key features?

What other documents are available?

When do I use this document?

What are the key features?

What else do I need to know?

Negotiating points

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

Create your document in 3 Easy Steps

PaperRock offers affordable, legal document templates, written by experienced and expert lawyers, trusted by businesses across the UK and beyond. No hidden charges or trial sign-ups are required to complete your document.

“I have worked in legal and business affairs for over 25 years and need access to a wide range of corporate and commercial legal precedents. Paperrock is a refreshing source of high-quality legal templates. Superb value for money.”

Amanda | Bannister Creative

“It’s hard to find legal documents on the internet you can really trust. Knowing an expert lawyer has drafted what I need, gives my business the edge and gives me peace of mind.”

Elle, Founder | Winslow skincare & aesthetics.

“As an SME Paperrock saves us the legal fees we’ve previously had to spend. In these challenging times that's a big help. Great products and support.”

Giles, MD | Boniti Ltd.

Articles of Association: established business single investor

When do I use this document?

What are the key features?

What other documents are available?

When do I use this document?

What are the key features?

What else do I need to know?

Negotiating points

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

Related Articles

Create your document in 3 Easy Steps

PaperRock offers affordable, legal document templates, written by experienced and expert lawyers, trusted by businesses across the UK and beyond. No hidden charges or trial sign-ups are required to complete your document.

“I have worked in legal and business affairs for over 25 years and need access to a wide range of corporate and commercial legal precedents. Paperrock is a refreshing source of high-quality legal templates. Superb value for money.”

Amanda | Bannister Creative

“It’s hard to find legal documents on the internet you can really trust. Knowing an expert lawyer has drafted what I need, gives my business the edge and gives me peace of mind.”

Elle, Founder | Winslow skincare & aesthetics.

“As an SME Paperrock saves us the legal fees we’ve previously had to spend. In these challenging times that's a big help. Great products and support.”

Giles, MD | Boniti Ltd.

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