What should be in the Memorandum and Articles of Association?

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Hello - please help me understand what the memorandum and articles of association are? I see that these are required if you want to register a company but I’ve never heard of them and I don’t know where to find them. What are they? What’s the purpose of them?

Please explain in layman's terms because I’m finding this whole company formation thing a total nightmare! There’s so much nonsense terminology that is putting me off. Thanks.

Answers

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You’re right about the terminology - it can be really confusing, even when you are familiar with registering and running a company, so don’t worry!

The memorandum of association and the articles of association are two separate legal documents. All companies, whether limited by shares or limited by guarantee, must have these documents when they are incorporated at Companies House.

Memorandum of association

The memorandum is a record of the first shareholders or guarantors who set up the company. It shows their names and indicates their agreement to register and join the company. There is a standard proforma memorandum that must be used, so this makes life easier. You can view and download it here.

If you register online through Companies House or a company formation agent, you don’t need to complete the memorandum yourself. Companies House will create one with the information provided on your application. A copy will be issued to you when your company has been registered.

If you incorporate using a paper application form, you will have to complete the memorandum yourself and file it with your application.

Articles of association

The articles of association is a more comprehensive document. It outlines all of the rules that govern how a company should operate, how decisions should be made and by whom, and what rights and duties the members and officers have.

Many new companies simply adopt Model articles from Companies House but these may not be suitable for all companies. If you want to issue more than one type of share, for example, you will have to create different articles to reflect this. You can use the Model articles as a template and alter certain provisions to better suit your company. However, if you need to draft a completely new version, I would advise speaking to an accountant or specialist advisor to ensure the legality of the final document.

10 months ago
 

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