The memorandum and articles of association are two of the documents created when a UK company is formed. They sound similar, but they do different jobs: the memorandum records the subscribers’ agreement to form the company, while the articles set out the rules for how the company will be run.
This guide explains what each document contains, when model articles are suitable and what to consider if the company has a more specialist ownership or share structure.
What is a memorandum of association?
The memorandum of association is the statement made by the original subscribers when the company is incorporated. For a company limited by shares, those subscribers agree to form the company and become its first shareholders.
When a company is registered online, the memorandum is normally created automatically as part of the formation. It becomes part of the company’s permanent incorporation record and cannot be updated after registration.
What are a company’s articles of association?
The articles of association are the company’s internal rules. They explain how directors make decisions, how shareholder decisions are taken and how shares and distributions are dealt with.
Many straightforward private companies use the standard model articles. A company may need tailored articles where the ownership, voting arrangements or share rights are more involved.
Memorandum and articles of association: the difference
| Document | What it does |
|---|---|
| Memorandum of association | Records the original subscribers’ agreement to form the company. |
| Articles of association | Set out the continuing rules for running the company and making decisions. |
What do articles of association normally cover?
Depending on the company and the articles used, they may cover:
- directors’ powers and decision-making;
- shareholder voting and resolutions;
- issuing and transferring shares;
- dividends and other distributions;
- different share classes and the rights attached to them; and
- administrative arrangements for meetings and notices.
Model articles or tailored articles?
Model articles are suitable for many straightforward formations. More detailed arrangements may be needed where there are several founders, multiple share classes, different voting or dividend rights, or specific rules about transferring shares.
The Company Shop can form companies with straightforward and specialist share structures. If bespoke legal drafting is required, that should be prepared or reviewed by a solicitor before the formation is submitted.
Can the articles be changed?
A company can usually change its articles after incorporation by passing a special resolution. The updated articles and the resolution must then be filed with Companies House within the required time.
The memorandum is different: it records the original formation and is not rewritten when shareholders or ownership arrangements later change.
Documents supplied after company formation
After incorporation, the company’s documents normally include its certificate of incorporation, memorandum and articles of association and the relevant statements submitted during formation. These should be kept with the company’s records.
Ready to form your company?
Our Belfast team can help with a limited company formation, including formations with multiple share classes where required. If you are unsure which company type fits what you are setting up, see our company formation options or contact us.