Articles of Association: family owner-managed company
This "memo and articles" document is for a trading company with a simple structure where two close family members, usually a wife, husband, civil partner or someone else very close to you, run a company together. It provides a reasonable, practical framework to enable both shareholders to manage and control the company.
- Solicitor approved
- Plain English makes editing easy
- Guidance notes included
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About this memorandum and articles of association
This set of articles is perfect for any new or existing company where you choose to operate business in "partnership" with a wife, husband, civil partner or someone else very close to you. Other variations are for specific circumstances. It does not matter what business is operated by your company. Articles are the frame in which you can place any picture - the rule book for operating your company. Use this document for a start-up or old company, for a trading company, website trader, service provider, car dealer, or any other.
We have provided the framework based on the model articles introduced under the Companies Act 2006. That act freed us from the longstanding straight jacket of a document few people dared to edit. Because you can now edit your articles more flexibly, you can make just the structure you need. The so called model articles will not suit you. There are many additions and omissions that are unworkable or impractical in the real world. You may read Company articles for a husband and wife team, and other articles which explain in more detail.
We have taken advantage of the new flexibility to give you a version which is simple and effective - and in plain English of course. So whether you are starting a new company or considering a change of articles from the old Table A, this should suit you well (but see below for specialist templates).
These articles are for a private company with a simple share structure. Most probably the company will have two shareholders, both of whom will be directors. Nonetheless, we have provided of the possibility of more, because it is easier for you to leave these provisions dormant now than for you later to have to change the articles, maybe to introduce a new director or hand shares to an employee.
So the document provides a balance between letting you to get on with making money, while protecting the interests of both shareholders, on the other hand. It is also suitable for a company where two shareholders decide to appoint a non-executive director to act as “referee” in the event of a dispute.
As with all Net Lawman documents, the drafting notes are immensely valuable. We give you comments and suggestions on every “article”.
If you intend to attach specific rights to the shares of each partner then Memo and Articles - with different classes of shares may be useful.
The articles in this document:
- are suitable for incorporating a new company or for changing an existing company
- more suitable for a structure with two or three shareholders.
- are not specific to any particular industry
- contain modern provisions in plain English
- allow you to construct your memorandum and articles of association to suit your exact business needs
- are full of practical and commercial help and suggestions
- include draft minutes of directors' and members' general meeting to change the articles. (Free bonuses from Net Lawman).
Use a shareholders’ agreement and director’s service contract too
As we have said, the articles of association of a limited company are its legal “constitution”. They are a framework within which the company must be managed. They can be changed - but only with the consent of at least 75% of the shareholders.
Within that framework, you need to set the rules for the detailed relationships between directors and shareholders. You want to be able to leave your articles alone but still change who does what, when someone wants to sell his shares or a new director is appointed.
A shareholders’ agreement lies, so to speak, on top of the company articles. Just by discussing the matters you should have in a shareholders agreement, you will find many areas you are glad to have considered. The more points are agreed - the fewer are left for disagreement. All of that detailed control is best exercised through a shareholders agreement.
Alternative versions of company articles
Of course, not everyone wants to run his, her, or their company in the same way. To avoid having to change your articles frequently, it is also sensible to draw them in ways that suit how your company might be operated in the next few years, not just what you need today. Therefore, we offer various alternatives - each covering different scenario, creates a unique structure.
Articles of Association: limited company (ltd) by shares is suitable for a company with shareholders in control with several directors and possibly some shareholders who are not directors. This is the “plain vanilla” version which most companies will choose.
Memo and Articles for shareholder-director for a simple structure controlled by one person, or a start-up with no complications.
For a husband and wife team, or maybe for other close family members with no outsiders. (this document)
Mostly private companies are limited by shares. However, if you want a company through which to operate a charity, club or non-for-profit association you will require articles for a company limited by guarantee.
This document was written by a solicitor for Net Lawman. It complies with current English law.
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