Articles of Association: equal 50/50 shareholders
As an accompaniment to a shareholders agreement between two equal shareholders, the shareholders should also consider adopting Articles of Association which reflect their equal shareholdings. This document is the form of Articles of Association for a private limited company with two equal shareholders.
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When do I use this document?
- for a company which is 50/50 owned by two equal shareholders
- in conjunction with their Shareholders Agreement – for Paper Rock’s template 50/50 Shareholders Agreement, see Shareholders Agreement: equal 50/50 shareholders
- for a private limited company incorporated in England and Wales
What are the key features?
- form of new Articles of Association for the company
- amendments and additions to the Companies Act 2006 Model Articles
- process for the allotment of new shares
- 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 on a shareholder ceasing to be employed or breaching the shareholders agreement
- tag-along and drag-along rights
- regulation of shareholder meetings
- as equal shareholders, rights of each shareholder to appoint an equal number of directors
- provisions relating to the proceedings of board meetings
- regulation of directors’ conflicts of interest and transactions with directors
What other documents are available?
For template Articles of Association where the company is owned by majority and minority shareholders, see
When do I use this document?
- for an indemnity clause to be included in a contract
- for a contract governed by English law
What are the key features?
- alternative forms of indemnity wording:
- indemnity from one party in favour of the other party
- mutual indemnity from both parties in favour of the other
- indemnity for breach of the underlying contract
- indemnity for potential loss arising from a third party claim
- wording for conduct of third party claims
What else do I need to know?
An indemnity is a contractual undertaking given by one party (the indemnifier) in favour of another party (the indemnified party or beneficiary) under which the indemnifier agrees to pay to the indemnified party the amount of any loss or damage which the indemnified party suffers as a consequence of a specified event.
The specified event might be:
- the breach of contract by the indemnifier
- liability of the indemnified party to a third party in relation to a specified event or circumstance
- a claim by a third party for loss or damage caused by the indemnifier’s breach of contract
Unlike other contractual obligations (and depending on the wording of the indemnity), an indemnity is not subject to legal rules and limitations regarding to the foreseeability of loss or the remoteness of damages which can be recovered by the beneficiary. In addition, the beneficiary is not legally obliged to mitigate its loss.
As a result and in exchange for agreeing to give the indemnity, the indemnifier may require that the beneficiary takes certain actions in relation to a claim or event which might give rise to a claim under the indemnity being made. These actions include:
- the notification of a claim from a third party in relation to the indemnified obligation
- an obligation on the indemnified party to take action required by the indemnifier to defend a third party claim
- allowing the indemnifier to take legal action in the name of the indemnifier to defend the third party claim
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Updated by a lawyer on 21/07/2025
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