BLP WS 6
Company Constitutions
The Company’s Constitution
Every company has a constitution. This comprises of certain key documents which evidence the existence of the
company, state its current share capital and rules which govern how the company should be run.
The company’s constitution is defined in s 17, s 29 and s 32 of the CA 2006, including:
Certificate of incorporation
Current statement of capital
Copies of resolutions affecting the articles
Articles of association
The Articles of Association
A company’s constitution includes the company’s articles: s 17(1)
They are internal rules which govern how a company is run - every company must have them: s 18(1)
They are a contract between the company and its members
They may not conflict with mandatory provisions of the CA 2006.
Always available for inspection by public at Companies House
Must be in single document, with numbered paragraphs: s 18(3)
There are THREE OPTIONS for a company’s articles:
1) Unamended model articles of association ; or
A company registered with no other articles will by default have unamended model articles as its articles:
s 20(1).
Act as a template when the constitution is silent of articles and it is a private company.
These are set out in the Companies (Model Articles) Regulations 2008 (SI 2008/3229).
1
, BLP WS 6
Content of the model articles for a private company limited by shares
Article Subject
number
1 Defined terms
2 Liability of members limited
s 3(1): a company is a limited company if the liability of its
members is limited by its constitution
s 17(1): company’s constitution includes company articles
3-6 Directors’ powers and responsibilities
2) 3 Directors responsible for management of company Model
5 Gives powers of delegation to directors – wide power articles of
4 Puts constraints on powers of the company exercisable by the directors
7-16 Decision-making by directors
9 Any director may call a director meeting
17-20 Appointment of directors
21-29 Shares
21(1) Relates to allotment of [new] shares
26 Relates to transfer of shares
30-35 Dividends and other distributions
36 Capitalisation of profits
37-41 Organisation of general meetings
42-47 Voting at general meetings
48-51 Administrative arrangements
52-53 Directors’ indemnity and insurance
association with amendments; or
It is possible to adopt amended model articles – special articles.
o It will often be the case that some of these rules are not suitable for a particular company.
o Model articles represent a bare minimum set of rules, so some entrepreneurs will want to set up
their companies with additional articles to provide greater clarity on how the company should be
run.
When setting up a new company with amended model articles, only a copy of the changes to the model
articles need be submitted with the application for registration (in accordance with s 20(1)(b)).
The amendments or any new articles included are known as ‘special articles’ to distinguish them from the
model articles themselves.
Examples of special articles amending model articles
Topic Model articles Special articles
Directors’ meetings The provisions for holding directors’ meetings Amending them to make them more formal, e.g.
are very flexible. requiring minimum period of notice be given
before a directors’ meeting, or to limit the ability
to take decisions by some electronic means.
Directors’ interests Article 14 prevents a director who has a personal Allowing directors to vote on and participate in
in transactions interest in a transaction with the company from any matter at board meetings, even where they
voting at or participating in a board meeting have a personal interest.
dealing with the transaction.
Number of The minimum number of directors for a private May wish to state 2 or more.
directors company is one, by virtue of s 154 CA 2006. Company’s best interests are best served when at
Under model articles, a single director can act least two decision makers.
alone, with all the powers given by articles and
company law.
2
Company Constitutions
The Company’s Constitution
Every company has a constitution. This comprises of certain key documents which evidence the existence of the
company, state its current share capital and rules which govern how the company should be run.
The company’s constitution is defined in s 17, s 29 and s 32 of the CA 2006, including:
Certificate of incorporation
Current statement of capital
Copies of resolutions affecting the articles
Articles of association
The Articles of Association
A company’s constitution includes the company’s articles: s 17(1)
They are internal rules which govern how a company is run - every company must have them: s 18(1)
They are a contract between the company and its members
They may not conflict with mandatory provisions of the CA 2006.
Always available for inspection by public at Companies House
Must be in single document, with numbered paragraphs: s 18(3)
There are THREE OPTIONS for a company’s articles:
1) Unamended model articles of association ; or
A company registered with no other articles will by default have unamended model articles as its articles:
s 20(1).
Act as a template when the constitution is silent of articles and it is a private company.
These are set out in the Companies (Model Articles) Regulations 2008 (SI 2008/3229).
1
, BLP WS 6
Content of the model articles for a private company limited by shares
Article Subject
number
1 Defined terms
2 Liability of members limited
s 3(1): a company is a limited company if the liability of its
members is limited by its constitution
s 17(1): company’s constitution includes company articles
3-6 Directors’ powers and responsibilities
2) 3 Directors responsible for management of company Model
5 Gives powers of delegation to directors – wide power articles of
4 Puts constraints on powers of the company exercisable by the directors
7-16 Decision-making by directors
9 Any director may call a director meeting
17-20 Appointment of directors
21-29 Shares
21(1) Relates to allotment of [new] shares
26 Relates to transfer of shares
30-35 Dividends and other distributions
36 Capitalisation of profits
37-41 Organisation of general meetings
42-47 Voting at general meetings
48-51 Administrative arrangements
52-53 Directors’ indemnity and insurance
association with amendments; or
It is possible to adopt amended model articles – special articles.
o It will often be the case that some of these rules are not suitable for a particular company.
o Model articles represent a bare minimum set of rules, so some entrepreneurs will want to set up
their companies with additional articles to provide greater clarity on how the company should be
run.
When setting up a new company with amended model articles, only a copy of the changes to the model
articles need be submitted with the application for registration (in accordance with s 20(1)(b)).
The amendments or any new articles included are known as ‘special articles’ to distinguish them from the
model articles themselves.
Examples of special articles amending model articles
Topic Model articles Special articles
Directors’ meetings The provisions for holding directors’ meetings Amending them to make them more formal, e.g.
are very flexible. requiring minimum period of notice be given
before a directors’ meeting, or to limit the ability
to take decisions by some electronic means.
Directors’ interests Article 14 prevents a director who has a personal Allowing directors to vote on and participate in
in transactions interest in a transaction with the company from any matter at board meetings, even where they
voting at or participating in a board meeting have a personal interest.
dealing with the transaction.
Number of The minimum number of directors for a private May wish to state 2 or more.
directors company is one, by virtue of s 154 CA 2006. Company’s best interests are best served when at
Under model articles, a single director can act least two decision makers.
alone, with all the powers given by articles and
company law.
2
