Articles of Association
Articles of association are the main constitutional document of a company which set out the basic management and administrative structure of the company. They regulate its internal affairs and are a public document which may be obtained from Companies House.
Bespoke articles of association may cover a wide range of areas, such as the following:
- The calling of directors’ meetings and their decision-making process;
- The appointment and retirement of directors and alternate directors;
- The ability and/or procedure for directors to act in circumstances where they are interested in a particular transaction or matter, or where they have a conflict of interest;
- The need for a Company Secretary;
- The indemnification of directors for certain losses and the provision of insurance to this end;
- The calling of shareholder meetings and their decision-making process;
- The definition of different classes of share, such as ordinary shares, preference shares and redeemable shares, and the rights attached to these;
- The ability for directors to allot new shares without the shareholders’ further authority;
- Pre-emption rights on the allotment of new shares and/or the transfer of existing shares;
- “Drag along” rights, being the right for majority shareholders with a specific percentage of the company to force minority shareholders to sell their shares to a buyer of the company;
- “Tag along” rights, being the right for minority shareholders to force the majority of other shareholders who wish to sell their shares to procure an offer for the minority’s shares from the same buyer.
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