Do You Need Bespoke Articles of Association? What the Model Articles Don’t Cover

Key takeaways

• Every company has articles: If a company does not register its own, the Model Articles apply by default. Whatever form they take, the articles bind the company and every shareholder, including future shareholders who never saw them. 

• The Model Articles are a starting point, not a deal: They contain no share transfer restrictions, leaver provisions, drag or tag rights, investor protections or deadlock mechanism. In practice, the majority decides. 

• Changing the articles has limits: A special resolution (75%) is needed, and the power must be exercised in good faith in the interests of the company. Some provisions can be entrenched. 
• Breach is not a simple contract claim: Whether a shareholder can enforce the articles depends on whose right has been infringed. The usual remedies are declarations and injunctions, alongside an unfair prejudice petition where the conduct is unfair. 

Most founders adopt the Model Articles when they incorporate. For a company with one shareholder, that is usually fine. The difficulty comes later, when co-founders, employees and investors join, and the document that decides who controls the company, who can sell shares and what happens when someone leaves is a set of default rules written for no company in particular. 

This article explains what articles of association are, what the Model Articles do and do not provide, how articles can be changed and what happens when they are breached. It is a companion to our guide to shareholders’ agreements. 

What are articles of association? 

The articles of association – or simply the articles – is a fundamental constitutional document which is required under section 18 of the Companies Act 2006 for companies that are incorporated and registered in England and Wales. The articles establish the core corporate governance rules which regulate the company’s internal affairs, including the appointment and removal of directors, issue and transfer of shares, dividend policy, and the rules governing the decision-making process by directors and shareholders.

If a limited company does not register articles, or registers articles that do not exclude or modify them, the relevant Model Articles apply automatically as if they had been registered (section 20). Unless they say otherwise, a company’s objects are unrestricted (section 31). 

The articles have contractual force. Under section 33, the provisions of a company’s constitution bind the company and its members as if each had covenanted to observe them. They are, however, a special kind of contract. They are public, filed at Companies House, and addressed to anyone who later becomes a shareholder. The courts therefore construe articles as a business document and will only imply terms where the articles, read as a whole, would reasonably be understood to mean them (Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 10). Background facts that only the founders knew will not generally be admissible to interpret them (Cosmetic Warriors Ltd v Gerrie [2015] EWHC 3718 (Ch), at [27]). 

What do the Model Articles provide?

The Model Articles for private companies limited by shares are short and flexible. Their main features are: 

• Management by the board. The directors manage the business and may exercise all the company’s powers (article 3), although shareholders can direct them by special resolution (article 4). 

• Board decisions. Decisions are taken by majority at a meeting or unanimously in writing (article 7). The quorum is two unless the directors fix another number (article 11), and the chair has a casting vote (article 13). 

• Appointing directors. A director can be appointed by ordinary resolution or by a decision of the directors (article 17). 

• Share transfers. Shares may be transferred by any usual form of transfer, but the directors may refuse to register a transfer (article 26). 

• Bonus issues. The directors may capitalise profits and reserves to pay up new shares if authorised by ordinary resolution (article 36). 

What do the Model Articles not cover? 

What matters most is what is missing. The Model Articles contain: 

• No restrictions on who can buy shares, other than the directors’ discretion to refuse registration. There are no pre-emption rights on transfer. See our article on share transfer restrictions. 

• No leaver provisions. A founder who leaves after six months keeps all of their shares. See our article on good and bad leaver provisions. 

• No drag-along or tag-along rights, so a single minority shareholder can block a sale of the whole company, and a minority has no right to join a sale by the majority. See our article on drag-along and tag-along rights. 

• No share classes or investor protections, such as preference shares, anti-dilution protection or investor consent rights. 

• No deadlock mechanism. In a 50:50 company, the chair’s casting vote can hand control of the board to one side. See our article on shareholder deadlock. 

Two statutory rules apply whatever the articles say. A director can be removed by ordinary resolution at a meeting, notwithstanding anything in any agreement between the company and the director (section 168). Articles can, however, give a shareholder’s shares weight

ed votes on that resolution, which the House of Lords upheld in Bushell v Faith [1970] AC 1099. And existing shareholders have a statutory right of pre-emption when new ordinary shares are issued for cash (section 561), which private companies can exclude or disapply (Part 17, Chapter 3). 

It is not necessary to adopt Model Articles as your company’s articles of association. Although, as they are readily available online, most companies adopt the Model Articles at the point of registration to meet the immediate legal requirements of incorporation, then later develop more tailor-made articles to appropriately encompass the governing rules of their specific company.

Articles or shareholders’ agreement: which do you need? 

Usually both. The articles bind every shareholder automatically, so provisions that must bind future shareholders, such as transfer restrictions, leaver provisions and drag-along rights, belong in the articles. You should ideally have both in place to ensure that the rights and remedies of the parties involved are adequately protected.A shareholders’ agreement is private and can usually be changed only with the consent of every party, so it suits confidential and commercial matters, such as investor consent rights and restrictive covenants. 

A shareholders’ agreement can also protect a minority against changes to the articles. A company cannot contract out of its statutory power to alter its articles, but shareholders can agree among themselves how they will vote, and those agreements are enforceable (Russell v Northern Bank Development Corporation Ltd [1992] 1 WLR 588). The two documents should say the same thing, and the agreement should state which prevails if they do not. 

How can the articles be changed? 

A company may amend its articles by special resolution (section 21), which requires a majority of not less than 75% (section 283). The amended articles and the resolution must then be filed at Companies House. A shareholder is not bound by an amendment made after they joined that requires them to take more shares or increases their liability to the company, unless they agree in writing (section 25). 

Specified provisions can be entrenched, so that they can only be changed if conditions more restrictive than a special resolution are met, such as the consent of a particular investor. Entrenchment can only be included in the articles on formation or by an amendment agreed by all the members (section 22). 

The majority’s power to amend is not unlimited. In Re Charterhouse Capital Ltd [2015] EWCA Civ 536, the Court of Appeal summarised the principles. The power must be exercised in good faith in the interests of the company. It is for the shareholders, not the court, to decide whether an amendment is for the company’s benefit, unless no reasonable person could think so. The burden is on the shareholder challenging the amendment (at [90]). Even a valid amendment may, in the circumstances, amount to unfairly prejudicial conduct (at [48]). Where an amendment varies the rights attached to a class of shares, the class consent procedure in section 630 also applies. 

What happens if the articles are breached?

It is sometimes said that the only remedy for a breach of the articles is a declaration that the act is void. The position is more nuanced, and it matters who is complaining and about what. 

• Rights held as a shareholder. A shareholder can bring a personal claim to enforce rights the articles give them in their capacity as a member, such as the right to vote or to receive a dividend that has been declared. The Privy Council recently confirmed that a shareholder can also personally challenge an allotment of shares made by the directors for an improper purpose, because the articles carry an implied term that the directors will exercise their powers properly (Tianrui (International) Holding Co Ltd v China Shanshui Cement Group Ltd [2024] UKPC 36). The usual remedies are declarations and injunctions, for example to restrain a meeting or set aside an allotment. 

• Wrongs done to the company. Where the directors have acted outside the articles, they are in breach of their duty to act in accordance with the company’s constitution (section 171). That duty is owed to the company, so the company is the proper claimant. A shareholder can sue only by bringing a derivative claim, with the court’s permission. 

• Rights held in another capacity. The articles bind the company and its members as members. They do not generally give enforceable rights to anyone in another capacity, for example as an employee or adviser, and they do not confer rights on third parties (Explanatory Notes to section 33). 

• Unfair prejudice. Where the company’s affairs are conducted in a manner unfairly prejudicial to a shareholder’s interests, the shareholder can petition the court (section 994). In companies run on the basis of personal trust, the court may also take account of informal understandings between the shareholders (O’Neill v Phillips [1999] UKHL 24). 

Articles of association: a practical checklist

When adopting or reviewing articles, a company is likely to need to consider: 

• Starting point. Whether the company still uses the Model Articles, and whether they suit its current shareholders. 

• Share classes. The rights attached to each class, including dividends, votes, return of capital and conversion. 

• Transfers. Pre-emption on transfer, permitted transfers, prohibited transferees and the directors’ power to refuse registration. 

• Exit. Drag-along and tag-along rights that bind every shareholder. 

• People. Leaver provisions and their consistency with option schemes and employment terms. 

• Board. Quorum, the chair’s casting vote, appointment rights and any weighted voting. 

• Protections. Whether any provision should be entrenched or protected by class consent. 

• Consistency. Alignment with the shareholders’ agreement, and filing any amendment at Companies House. 

At Maybrook Law, we draft bespoke articles of association for founders, investors and joint venture partners, and we act in shareholder disputes when articles are tested. Seeing both sides tells us which provisions matter when relationships break down. If you are bringing in co-founders or investors, or your company is still relying on the Model Articles, we would be pleased to advise on your position. 

This article reflects the law as at 8 July 2026. Our insights, articles and guides do not, and are not intended to, constitute legal advice or be an exhaustive review of all legal developments. Although every effort is made to ensure that the information provided in this article is accurate as of the publication date, please be aware that this area of law may be subject to change. Please seek legal advice before applying the information provided to any specific circumstances, transactions or legal issues.