Articles of Association: wholly-owned company

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These Articles of Association are for a wholly-owned private company limited by shares.  They amend (rather than replace) the Model Articles for specific matters. The adoption of these Articles of Association will require a special shareholder resolution.  Please note that these Articles of Association are not suitable if the company has more than one shareholder.

 

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Articles of Association Template : wholly-owned company

Articles of Association template for a wholly-owned company 

Background

What are the Model Articles?

The Articles of Association of a company are the rules which its directors and shareholders must comply with in the operation and management of the company.  They operate as a contract between the shareholders and the company.  The directors of a company are under a statutory duty to act in accordance with its Articles of Association.

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.

The Model Articles can be adopted by a company as its Articles of Association.  Unless varied or replaced by a different set of Articles of Association, the Model Articles will apply.  On formation of a company, the formation process requires a company either to confirm that the Model Articles will apply or to provide its own set of Articles of Association.

Does a company need Articles of Association other than the Model Articles?

The Model Articles will operate adequately in most circumstances in the case of a company which is wholly-owned by a single shareholder.  For a company which has two or more shareholders, the Model Articles should be amended or replaced by the company’s own form of Articles of Association.

Under what circumstances would a wholly-owned company benefit from its own set of Articles of Association?

The circumstances where a wholly-owned company might benefit from its own set of Articles of Association include:

  • a company with a single director.  Following a reported legal case in 2022, there is legal uncertainty as to whether a single director of a company which has adopted the Model Articles without amendment can alone legally manage and take decisions on behalf of a company if, previously, the company had had more than one appointed director.  The Model Articles can be amended to remove this legal uncertainty.
  • a company with one or more directors who are not the sole shareholder.  The Model Articles require the appointment of a director to be approved at a board meeting.  Unless the director elects to resign (or in certain other limited circumstances), the removal of a director requires a shareholder resolution passed at a general meeting of shareholder of which special notice under the Companies Act has been given.  The Model Articles can be amended to enable the sole shareholder to appoint, remove and replace directors simply by giving written notice to the company.
  • director voting on transactions between the director and the company.  The Model Articles restrict a director from voting on a matter which involves a transaction between the director and the company.  To avoid having to pass a shareholder resolution to approve such a transaction, the Model Articles can be amended in advance to allow the relevant director to vote in these circumstances.
  • purchase of own shares.  The Companies Act permits the small purchase of its own shares by a company out of capital if this is permitted by the Articles of Association.  The Model Articles do not contain this permission and can be amended to include it.
  • change of name.  The Companies Act allows a company to change its name in circumstances provided for in the Articles of Association.  The Model Articles do not make specific provision for a change of name and can be amended to allow a change of name to be approved by directors rather than requiring a special shareholder resolution.

About these Articles of Association

These Articles of Association are for a wholly-owned private company limited by shares.  They amend (rather than replace) the Model Articles for specific matters.  

The adoption of these Articles of Association will require a special shareholder resolution.  For simplicity, this can be passed as a written resolution signed by the sole shareholder.

Once adopted, the new Articles of Association (and shareholder resolution) will need to be filed at Companies House within 15 days of the passing of the shareholder resolution.

Please note that these Articles of Association are not suitable if the company has more than one shareholder. 

For examples of Articles of Association where the company has more than one shareholder, see our documents Articles of Association: equal 50/50 shareholders and Articles of Association: majority/minority shareholders.

Document features – Articles of Association template

Features include:

  • Specific amendments to the Model Articles for private companies limited by shares.
  • Amendments covering the following matters:
    • number, appointment and removal of directors
    • proceedings of directors and quorum for board meetings
    • directors’ conflicts of interest and transactions with directorsauthority to allot shares
    • purchase of shares out of capital
    • change of company name
    • proceedings of shareholders
    • indemnities and insurance for directors of group companies

  Explanatory guidance

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

Articles of Association: Wholly-owned company

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