Articles of Association: multiple share classes
This "memo and articles" document is for a trading company with a structure having different classes of shares. Each class has different rights requiring articles to support, control and protect. This template provides a reasonable, practical and balanced framework to manage and control the company, while protecting each class of shareholder.
- Solicitor approved
- Plain English makes editing easy
- Guidance notes included
- Money back guarantee
About this memorandum and articles of association
This set of articles has been drawn for a company requiring different classes of shares. It does not matter how many different classes nor what rights attach to each class. You decide what rights will be different from one group to another and "slot in" in your own words, based on the examples we have provided in the document. The possibilities are endless. Some of the most common are: dividend rights, special rights to appoint directors, rights that apply only in particular circumstances, rights which prevent transfer of control of the company (sometimes called "Golden Share" rights), rights attaching to employee shares and many more. You may read, Company structure with different classes of shares and other articles which explain in more detail.
Having different classes of shares is not simply a matter of setting out class rights. We have made many consequential important changes in other articles to provide an efficient corporate structure, set up as you will most likely require. For example, each class may require representation on the board of directors. We give you comments and suggestions on every “article”. You may easily edit it making it suitable for you, with the help of drafting notes which are immensely valuable as with all Net Lawman documents.
The framework we provided here is of course based on the model articles provided in 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.
Are these articles suitable for your company?
If you need to issue shares of a different class from your basic £1 ordinary shares, you need special provisions. Yes, you could simply change your existing articles to provide for the rights attaching to the new shares. But as you move forward you will find other provisions in your articles that require change too. You need this set of articles because the entire document has been prepared with a view to setting appropriate structure, checks and balances for a company with different share classes.
We have therefore provided a structure to protect every shareholder - not in a way that will “upset the apple cart” but so that each shareholder knows not only what is his entitlement but how it is limited.
The articles you buy now, in this document:
- are suitable for incorporating a new company or for changing an existing company.
- provide options you may choose for different classes of shares.
- 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 the Net Lawman).
Use a shareholders’ agreement 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. The most efficient way to operate your company is to keep the articles "clean" of everything likely to change soon. Stick to principles and a structural framework.
To deal with detail and management issues it is essential that you have a shareholders’ agreement. If there are conflicting interests represented among the shareholders, you should also make sure each director has a director’s service contract. That way, there can be no misunderstand about responsibilities and power.
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 will be used by most companies.
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.
What other customers thought
Average customer rating
"I have used you in the past and am always impressed!"Diane Bantten (Acquit Debt Recovery)
"A great site for small business owners. I have required two documents and you have been able to provide both at a modest cost. Both documents have met with my requirements and saved me on legal fees. Keep up the good work."Warren Brogden
"Reasonable price. Contained just the layout and info I needed. Saved time in production and of course legal fees."Don Eade