Rules Governing Articles of Association During A Company Formation

Rules Governing Articles of Association During A Company Formation
The Articles of Association of every company must adhere to
certain administrative rules in that they must be printed
and divided into paragraphs numbered consecutively. When
submitting the Articles of Association to Companies House
during a company formation they Articles must also be
signed by the same persons who have signed as subscribers
to the company formation Memorandum of Association.

The Articles of Association is a long document set out in a
specific manner and covering items such as the issue and
allotment of shares and capital, procedures to be adopted
at meetings, borrowing powers and precise details relaying
to the office of director. It is normal for the Articles of
Association to state rules on the appointment, voting and
removal of directors.

A company limited by shares can adopt a standard set of
Articles, Table A. When a new company limited by shares is
being formed and adopts Table A unmodified it is not
required that the new company submits Articles of
Association. However when adopting Table A unmodified the
persons forming a company must include a letter to
Companies House stating that the Articles of Association,
Table A are being adopted in unmodified terms.

Table A is a standard set of Articles of Association for a
company limited by shares. The unmodified Table A can be
changed at a later date after the limited liability company
formation by special resolution which should be approved by
the members in a general meeting.

After passing the special resolution to change the Articles
of Association a copy of that resolution must then be
registered with the Company registrar. In addition all
future copies of the Articles of Association should include
the modification

If Table A is adopted without modification then the company
being formed must appoint at least two directors. A private
company can have just one director provided the Articles of
Association permit a single director in which case a
modified Table A must be delivered to Companies House
incorporating the changes made.

Every new limited company must have at least one director
and one company secretary. A sole director may not also be
the company secretary while if there are two or more
directors one of those directors can also be designated and
act as company secretary.

No special qualifications are required for the company
secretary of a small private company. Qualifications are
required for the post of company secretary in a public
limited company

Different company registration rules apply for a company
that is not a company limited by shares. Other model sets
of Articles of Association would be applicable and must be
delivered to Companies House when forming a company and
completing the company registration. Tables C, D and E are
Articles of Association applicable to a company limited by
guarantee both with and without shares and an unlimited
company.

One essential consideration every potential member of a new
company should be to read and understand the provisions
contained within the Articles of Association. When a
business goes well and all members and directors are in
agreement few problems arise. But nothing lasts forever and
excluding amending the Articles of Association future
directors and their relationship with each other and
management of the company are governed by the Articles.

It is quite common for a company that has a controlling
shareholder to adopt a modified set of Articles. Such
modifications generally removing many of the restrictive
practises a director may adopt with other changes to voting
rights.

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starting a limited company