UK Articles of Association Explained: Model Articles vs Bespoke

The articles of association are a UK company’s internal rulebook. Under Companies Act 2006, section 17, a company’s constitution includes its articles, and under section 33 the articles bind the company and its members as a contract. For most founders, the choice is between adopting the default Model Articles, a modified version, or fully bespoke articles. This deep-dive explains each route, the statutory background, and where the trade-offs lie in practice.

What the Articles Do

Articles regulate the company’s internal affairs. They set out:

• How directors are appointed, removed, and how they take decisions
• How shares may be issued, transferred, and what rights attach to them
• How general meetings are called and how members vote
• How dividends are declared and paid
• How communications are sent between the company and its members

They are public — once filed at Companies House under section 18, they appear on the company’s public record and remain available to anyone via the public register at https://find-and-update.company-information.service.gov.uk/.

Three Routes Under Section 20

Under Companies Act 2006, section 20, on registration a company is treated as having adopted the prescribed Model Articles for its type unless it registers different articles. The three practical routes are therefore:

The Model Articles for a private company limited by shares are prescribed in Schedule 1 to the Companies (Model Articles) Regulations 2008 (SI 2008/3229), available at https://www.legislation.gov.uk/uksi/2008/3229/contents/made. Government overview guidance is at https://www.gov.uk/guidance/model-articles-of-association-for-limited-companies.

What’s Inside the Model Articles

The Model Articles for a private company limited by shares run to 53 articles in five parts.

Part 2 — Directors (Articles 3–20)

Part 2 covers directors’ powers, decision-making, conflicts of interest, and delegation. Notable provisions:

• Article 3 — directors’ general authority is “subject to the articles, the directors are responsible for the management of the company’s business, for which purpose they may exercise all the powers of the company”
• Article 7 — directors take decisions either by majority at a meeting or by unanimous written resolution
• Article 13 — chair has a casting vote at directors’ meetings unless the chair is a 50/50 shareholder situation (in which case the casting-vote rule is disapplied — a frequent source of deadlock)
• Article 14 — director with a personal interest in a transaction may not vote unless the conflict is disregarded under specific provisions
• Article 17 — appointment of directors by ordinary resolution of members or decision of the existing directors

Part 3 — Shares and Distributions (Articles 21–35)

Part 3 covers share rights, transfers, share certificates, and dividends:

• Article 21 — all shares are to be fully paid up
• Article 22 — directors may not allot shares except as authorised
• Article 26 — share transfers require directors’ approval; the directors may refuse to register a transfer (a powerful default that many founders should consider modifying)
• Article 30 — final dividends declared by ordinary resolution; interim dividends declared by directors

Part 4 — Decision-Making by Shareholders (Articles 36–47)

Part 4 covers general meetings:

• Article 36 — general meeting quorum is two members (or one if there is only one member)
• Article 38 — chair appointment at general meetings
• Article 42 — voting on a show of hands (one vote per member) or on a poll (one vote per share)

Part 5 — Administrative Arrangements (Articles 48–53)

Communications, company seals, indemnification of directors.

When the Model Articles Are Sufficient

For a single-founder, single-class company with no plans to raise external capital in the near term, the Model Articles are perfectly adequate. They are professionally drafted, cost nothing, and are tested in practice. If the founder later wishes to take in investment, articles can be amended by special resolution under Companies Act 2006, section 21 (a 75% majority of those voting).

When to Modify the Model Articles

Modification, rather than wholesale replacement, is appropriate where the company needs one or two specific provisions different from the default. Common modifications:

1. Pre-emption Rights on Share Transfers

The Model Articles’ default — directors may refuse to register a transfer (Article 26) — provides a veto, but no clear path to exit. In a two-founder company where each is a director, each can block the other’s transfer indefinitely. Adding a structured pre-emption clause (the proposing transferor must offer the shares to existing members at a fair price first) gives a route to exit while protecting the cap table.

2. Casting Vote at General Meetings

The default at general meetings is no casting vote. In a 50/50 deadlock at member level, no resolution can be passed. A modification giving the chair a casting vote at general meetings (in addition to the default board casting vote) provides a tie-breaker.

3. Drag-Along and Tag-Along

If a majority shareholder wants to sell to a third party, they may want to “drag along” minority shareholders to sell on the same terms (so the buyer gets 100%). Conversely, minority shareholders may want a “tag-along” right (if the majority sells, minority can sell on the same terms). Neither is in the Model Articles.

4. Different Share Classes

Investor-led structures often use multiple share classes — Ordinary, Preference (with priority on dividend or on liquidation), Founder shares with weighted voting, etc. The Model Articles assume a single class.

5. Bad Leaver / Good Leaver Provisions

Where a founder leaves before vesting completes, “leaver” provisions allow the company or remaining shareholders to repurchase the leaver’s shares — at fair value (good leaver) or par value (bad leaver). These are bespoke provisions, generally part of a shareholders’ agreement and the articles.

When to Use Wholly Bespoke Articles

For investor-backed companies (Seed Enterprise Investment Scheme rounds, EIS rounds, VC rounds), bespoke articles are the norm. Investors will require:

• Pre-emption on issue (anti-dilution)
• Pre-emption on transfer (above)
• Liquidation preferences
• Investor consent rights for major decisions
• Information rights
• Director appointment rights tied to shareholding thresholds

These provisions are typically drafted by the investors’ lawyers and adopted by special resolution under section 21 at the time of the investment round.

How to File Articles at Companies House

When forming a company through Web Filing (https://www.gov.uk/limited-company-formation/register-your-company):

1. Choose “Model Articles” → no further action; the Model Articles apply
2. Choose “Model Articles with amendments” → upload a marked-up document showing the changes
3. Choose “Bespoke articles” → upload the full text

For an existing company, articles are amended by:

1. Passing a special resolution (75% majority of those voting)
2. Filing the amended articles with Form CC02 (or attaching them to the special resolution copy filed under section 30) within 15 days
3. Payment of the relevant filing fee

Companies House file-your-company-information service: https://www.gov.uk/file-your-company-information.

Common Mistakes — Gyoseishoshi View

Adopting the Model Articles in a 50/50 company. This is the most common pitfall. The default casting-vote rule is disapplied where directors are equal shareholders, so deadlock at every level is structurally possible. Either appoint a third director with a chair role, or modify the articles to provide a clear deadlock mechanism, or have a separate shareholders’ agreement with binding deadlock procedures.

Forgetting that articles bind as a contract. Under section 33, articles bind the company and its members. A shareholder who breaches the articles (e.g. by transferring shares without going through pre-emption) can be sued for breach. Conversely, a shareholder who is denied a right granted by the articles can sue.

Confusing articles with shareholders’ agreements. Articles are public; shareholders’ agreements are private. Articles are amended only by special resolution; shareholders’ agreements bind only the parties. Most well-advised founders use both — articles for what should be public and procedural, shareholders’ agreements for confidential commercial terms.

Filing partial articles. When filing modifications, ensure the document is internally consistent. A common mistake is to add a pre-emption clause without disapplying the corresponding Model Article 26, leaving two contradictory rules on the same topic.

When to Update Existing Articles

Articles should be reviewed at:

• The first investment round (always)
• A change of business model that affects share rights
• A 50/50 shareholding becoming unbalanced
• A founder departing
• The introduction of an EMI option scheme — see HMRC guidance at https://www.gov.uk/tax-employee-share-schemes/enterprise-management-incentives-emis

Conclusion

The Model Articles are a thoughtful, free default that fits 70% of new UK private companies. The 30% that need more — two unrelated co-founders, investor capital, multiple share classes — should use a Modified Model Articles document or wholly bespoke articles, drafted to address the specific commercial situation. The articles, once filed, are public, and they bind the company and its members as a contract under section 33. Treat them with the same care as any contract.

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Disclaimer

This article provides legal information, not legal advice. MmowW Scribe is a document preparation service operated by a licensed Gyoseishoshi (行政書士) office in Japan. We are not solicitors, barristers, or attorneys.

Sources

1. Companies Act 2006: https://www.legislation.gov.uk/ukpga/2006/46/contents
2. Companies (Model Articles) Regulations 2008 (SI 2008/3229): https://www.legislation.gov.uk/uksi/2008/3229/contents/made
3. Model articles of association for limited companies — gov.uk guidance: https://www.gov.uk/guidance/model-articles-of-association-for-limited-companies
4. Register your company (Web Filing): https://www.gov.uk/limited-company-formation/register-your-company
5. File your company information: https://www.gov.uk/file-your-company-information
6. Public register search: https://find-and-update.company-information.service.gov.uk/