ARTICLES OF ASSOCIATION FOR A WHOLLY-OWNED COMPANY
The Companies Act 2006 (and associated regulations) provide a model set of Articles of Association for each of the different types of company which can be formed. These include Model Articles for private companies which are limited by shares.
Unless varied or replaced by a different set of Articles of Association, the Model Articles provided by the Companies Act 2006 will apply.
The Model Articles will operate adequately in most circumstances in the case of a company which is wholly-owned by a single shareholder. There are circumstances however where a wholly-owned company might benefit from its own set of Articles of Association. These include:
- where the company has a single director.
- where the company has one or more directors who are not the sole shareholder.
- where a director may be required to vote as a director on transactions between the director and the company.
- for future administrative matters, including a purchase of own shares by the company or a change of company name.
ARTICLES OF ASSOCIATION FOR A COMPANY WITH TWO OR MORE SHAREHOLDERS
As an accompaniment to a shareholders agreement between two or more shareholders, the shareholders should also consider adopting Articles of Association which reflect their shareholdings.
Typical matters covered by Articles of Association in these circumstances include provisions relating to:
- the allotment of additional shares
- transfers of shares
- shareholder meetings
- rights to appoint directors and proceedings of directors