Articles of Association: What They Are and Why Your Business Should Care

When you set up a limited company, you probably did not spend much time thinking about the Articles of Association. It is one of those legal documents that tends to get filed away and forgotten – until it suddenly matters.

But here is the thing: your Articles are a big deal. They are essentially the instruction manual for how your company is run. Whether you are launching a startup, bringing on new shareholders, or just planning for the future, getting your Articles right can make a real difference.

So, what exactly are Articles of Association?

In simple terms, the Articles of Association (or just “Articles”) set out the rules for running your company. They cover things like:

• How decisions are made;
• What powers the directors have;
• How and when shares can be issued or transferred;
• The rights of shareholders;
• What happens if there is a disagreement or a change in ownership.

Every company must have Articles when it incorporates – and if you did not write your own, you probably have the government’s default version (known as the Model Articles). They do the job for very simple setups, but they are not always suitable if your company has multiple directors, different types of shareholders, or plans to grow.

Why you might need more than the basics

The Model Articles are a bit like a one-size-fits-all suit – they might work okay at first, but they are rarely a perfect fit. As your business evolves, those off-the-shelf rules may not give you the protection, flexibility, or clarity you need.

Tailored Articles can help:

• Prevent misunderstandings between directors or shareholders;
• Set clear processes for decision-making and voting;
• Protect minority shareholders or establish majority control;
• Create restrictions around share sales or exits;
• Make your company more attractive to investors or buyers.

Many business owners only realise the importance of their Articles when something goes wrong – a disagreement between directors, a shareholder looking to leave, or an investor wanting certain rights. At that point, sorting it out is often harder (and more expensive) than if it had been planned properly from the start.

When should you take a closer look?

Here are a few moments where it is worth reviewing your Articles:

• You are adding new shareholders or directors;
• You are issuing new shares or creating share classes;
• You are restructuring the business or planning a sale;
• You are seeking investment;
• You have never actually read your Articles (do not worry, you are not alone!).

Let’s get it sorted

Your Articles of Association might not be the most exciting part of running a business – but they are one of the most important. Having a clear, well-drafted set of rules in place gives you confidence, protects your company, and helps everything run more smoothly.

At Moore & Tibbits, we help businesses of all sizes review, update, and tailor their Articles so they truly reflect how the company is run. No jargon, no copy-paste templates – just practical advice that works for your business.

Ready to make sure your foundations are solid?
Get in touch with our friendly team today – email Monika on monikaj@moore-tibbits.co.uk or speak to our Commercial Team on 01926 491181.

Article by: Monika Jirec | Paralegal