It is common for new companies to adopt the default ‘Model’ articles of association prescribed by the Companies Act 2006. In certain situations, however, it may be necessary to set up a company with bespoke articles that are tailored to the individual requirements of the business. We explain how to do this below.
Key takeaways
1. Tailoring articles of association enhances clarity and aligns company objectives with shareholder needs.
2. Seek legal advice when drafting bespoke articles to ensure compliance with the Companies Act 2006.
3. Choose postal application for bespoke articles, but be aware of higher costs and longer processing times.
Using amended or bespoke articles for a new company
When setting up a company in the UK, you can adopt Model articles in their entirety, Model articles with amended provisions, or bespoke articles. It depends on your particular circumstances.
If you find that the Model articles are inadequate or not quite right for your business, the following options are available to you:
- amend the Model articles by rewording existing provisions
- customise the Model articles by adding, removing, or altering certain provisions
- create entirely bespoke articles of association
Making any such changes will ensure that the articles you adopt during the company formation process are fit for purpose, aligning with the objectives of the company and the needs of the shareholders or guarantors who own it (aka the company ‘members’).
For example, maybe you want to vary the rights and duties of shareholders or impose stricter rules on issuing and transferring shares. Or perhaps you need to enhance or restrict the directors’ powers, or specify different rules and procedures for company meetings and decision making. These are just some of the matters that can be dealt with in the articles.
Whatever your requirements, adopting tailor-made articles can provide greater clarity and reassurance to members and directors, minimising the risk of confusion or future conflict within the company.
It’s entirely up to the founding members what to include in the articles of association, so you must discuss this matter together to ensure that everyone’s needs and expectations are met.
However, the articles must be consistent with company law, as set out in the Companies Act 2006. Therefore, given their fundamental importance and the potential for error, you may wish to seek help and advice from a legal practitioner when drafting your own articles.
Once finalised, you will need to provide a copy of the amended or bespoke articles to Companies House when you apply to register your company. If you fail to include your own articles, the model version will automatically be inserted and will apply.
How to set up a company with your own articles
You can only use Companies House’s online incorporation service if you’re planning to adopt Model articles in their entirety. In all other cases, you need to apply by post using Companies House form IN01. However, postal applications are more expensive (£71) and take far longer to process than online applications.
Thanks for reading
If you are ready to form a company with bespoke or amended articles or would like to find out more about the requirements and incorporation process, please get in touch with our company formation team and they will be happy to help.
Join The Discussion