Articles of Association equal 50/50 shareholders
Articles of Association for a company owned by two equal shareholders
Background
When should Shareholders adopt Articles of Association?
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.
The shareholders agreement is a private agreement between the shareholders (and often the company as well). The Articles of Association are filed at Companies House and available to the public. Â
Typical matters covered by Articles of Association include provisions relating to:
- the allotment of additional shares
- transfers of shares
- shareholder meetings
- rights to appoint directors and proceedings of directors
About this document:Â Articles of Association equal 50/50 shareholders
This document is the form of Articles of Association for a private limited company with two equal shareholders.
Document features
- the directors’ authority to allot further shares
- provisions relating to 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
- the allotment of additional shares
- 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
- the regulation of directors’ conflicts of interest and transactions with directors
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