Articles of Association
Every limited company needs a Memorandum of Association (setting out the purpose for which the company exists) and Articles of Association (dealing with how the company is run). These documents together form a limited company’s constitution.
Although there are default Articles which apply to the majority of companies these can be amended to meet the company’s specific needs.
For example, you might want restrictions on shareholders selling their shares, restrictions on the issue of new shares which might otherwise dilute the existing shareholders’ interests and so on.
These types of issue are often also dealt with in a shareholders agreement. However, because a shareholders agreement is a contract between the shareholders any breach would only (usually) allow a shareholder to claim damages. In such circumstances, any transfer of shares in breach of a shareholders agreement will still be a valid transfer if it does not breach the Articles of Association.
How can we help?
We can help to review and amend your Articles to ensure they are right for your company and give you the protection you need.