Companies FAQ

Q. What are Memorandum and Articles of Association?

The Memorandum of Association states the name(s) of the initial subscribers (the people who will hold the shares in the company, or in the case of a company limited by guarantee, the people who will be the ‘members’). Once the company has been incorporated, the memorandum will no longer affect the ongoing operation of the company and it cannot be amended. It is used purely for the incorporation of the company.

There is no longer a requirement to state the objects of the company. However, it is possible to insert an objects clause into the Articles of Association. Please contact us for further details, should you require our help in adding an Objects Clause.

There is also no longer the requirement for an Authorised Share Capital within the Memorandum of Association. This has been replaced by the ‘Statement of Capital’, which confirms the number of shares issued in the company at any one time. The statement of capital is completed on incorporation of the company (on the form IN01) and on certain forms completed during the company’s lifetime (e.g. Annual Return or on the SH01 form when the company issues new shares). It shows the following information:

  • total number of shares in issue
  • the aggregate nominal value of those shares,
  • each class of shares -

(a) prescribed particulars of the rights attached to the shares
(b) the total number of shares of that class,
(c) the aggregate nominal value of shares of that class, and
(d) the amount paid up and the amount (if any) unpaid on each share (whether on account of the nominal value of the share or by way of premium).

Companies Limited by Guarantee do not have shareholders and are therefore not required to submit a Statement of Capital.

The term Articles of Association of a company are often simply referred to as articles (and are often capitalised as an abbreviation for the full term). The Articles are a requirement for the establishment of a company under the law of the United Kingdom. Together with the memorandum of association, they constitute the constitution of a company.

The Articles can cover a range of topics, not all of which is required in a country's law. Although all terms are not discussed, they may cover:

The issuing of shares (also called stock), different voting rights attached to different classes of shares.

The appointments of directors - which shows whether a shareholder dominates or shares equality with all contributors.

Directors and general (members) meetings - the quorum and percentage of vote.

Management decisions.

Transferability of shares.

Special voting rights of a Chairman,and his/her mode of election.

The dividend policy - a percentage of profits to be declared when there is profit or otherwise.

Winding up - the conditions, notice to members.

Confidentiality of know-how and the founders' agreement and penalties for disclosure.

Q. How can I access a set of Model Articles?

The Companies (Model Articles) Regulations 2008 were made on 16 December 2008. The final version of the Model Articles can be accessed here.

Q. Who will the new Articles apply to?

The new Articles apply to private and public companies incorporated on or after 1 October 2009 who choose to adopt them in their entirety or with amendments. They will also apply by default to companies formed under the Companies Act 2006 unless they register their own articles. These model articles apply to new companies incorporated on or after 1 October 2009. If the proposed company chooses to adopt model articles without any amendments it does not need to send a copy of the articles to Companies House.

Q. What is Table A?

All companies are required to adopt articles of association when they incorporate. Tables A to F of the Companies (Tables A to F) Regulations 1985 (more commonly know as Table A) set out standardised model articles, which companies can use as the basis for their own articles. If companies do not register their own articles of association, Table A applies by default.

Q. Why has Table A been amended?

Tables A to F have been amended to bring them in line with changes in company law. The Government made regulations in September 2007 making amendments to the Table A regulations to enable new companies formed on or after 1 October 2007 to take advantage of, and avoid conflict with the Parts of the Companies Act 2006 that came into effect by that date.

Q. When was the new Table A introduced?

The new Table A came into force on Monday 1 October 2007.

Q. How do these changes relate to the new draft model articles that come into effect on 1 October 2009?

The regulations setting out the model articles were made in December 2008 and commenced on 1 October 2009. The changes to Table A have no impact on the model articles. When the model articles come into force in 2009 they replaced Table A as default articles; but a company which already has the revised Table A and its articles will not be affected by the model articles unless it chooses to switch to them.

Q. I am about to register a new company - how does this affect me?

The changes made by Government to Table A in September 2007 have ensured that the default articles which apply when a company does not register its own articles, are consistent with company law in force from 1 October 2007.

Q. How do these changes affect an existing company?

New Table A does not affect existing companies unless they choose to adopt it. Existing companies can choose to amend their current articles of association, by special resolution, to bring them in line with changes in the law as expressed in the revised Table A.

Q. What are the latest amendments to tables C and E and when they will take effect?

In April 2006 provision 54 of the Table C and provision 2 of the Table E were amended to bring them into line with the Companies Act 2006.

Regulation 54 of the Table C (vote of members) was ambiguous in terms of whether it allowed the proxies acting on behalf of members of a company limited by guarantee the new right to vote on a show of hands prescribed by sections 284 and 324 of the Companies Act 2006. Proxies are now specifically mentioned in the regulation.

Regulation 38 of Table E sets a notice period of 7 days for general meetings of unlimited companies. This was in conflict with section 307 of the Companies Act 2006 which requires at least 14 days notice so regulation 38 was deleted from Table E.

Q. Is there also be a model set of articles for companies that are limited by guarantee?