THE COMPANIES ACT 2006
PRIVATE COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION OF _________
Exclusion of model articles
These articles are adopted as the company's bespoke articles. The model articles for private companies limited by shares prescribed by Schedule 1 to the Companies (Model Articles) Regulations 2008 do not apply to the company.
PART 1
LIMITATION OF LIABILITY
In these articles, unless the context otherwise requires, words and expressions which are defined in the Companies Act 2006 (as in force on the date when these articles become binding on the company) have the same meaning as in that Act, and any reference to a statutory provision includes any subordinate legislation made under it and any modification or re-enactment of it for the time being in force.
Liability of members
1. The liability of the members is limited to the amount, if any, unpaid on the shares held by them.
PART 2
DIRECTORS
DIRECTORS' POWERS AND RESPONSIBILITIES
Sole director
2. The company shall have one director, who must be a natural person aged at least sixteen years
Directors' general authority
3. Subject to the articles, the director is responsible for the management of the company's business, for which purpose they may exercise all the powers of the company.
Members' reserve power
4. a. The members may, by special resolution, direct the director to take, or refrain from taking, specified action.
b. No such special resolution invalidates anything which the director have done before the passing of the resolution.
Directors may delegate
5. a. Subject to the articles, the director may delegate any of the powers which are conferred on them under the articles—
i. to such person or committee;
ii. by such means (including by power of attorney);
iii. to such an extent;
iv. in relation to such matters or territories; and
v. on such terms and conditions;
as they think fit.
b. If the director so specify, any such delegation may authorise further delegation of the director' powers by any person to whom they are delegated.
c. The director may revoke any delegation in whole or part, or alter its terms and conditions.
Committees
6. a. Committees to which the director delegate any of their powers must follow procedures which are based as far as they are applicable on those provisions of the articles which govern the taking of decisions by the director.
b. The director may make rules of procedure for all or any committees, which prevail over rules derived from the articles if they are not consistent with them.
DECISION-MAKING BY DIRECTORS
Decisions of sole director
7. If the company has only one director, and no provision of these articles requires it to have more than one director, that director may take decisions without regard to any of the provisions of the articles relating to directors' decision-making, quorum or meetings, except where the Companies Act 2006 requires otherwise. The sole director must record in writing every decision taken and sign the record.
Loans to directors
8. The company may not make loans to directors, or give guarantees or provide security in connection with loans to directors, except where required or permitted by the Companies Act 2006.
Records of decisions to be kept
9. The director must ensure that the company keeps a record, in writing, for at least ten years from the date of the decision recorded, of every unanimous or majority decision taken by the director.
Directors' discretion to make further rules
10. Subject to the articles, the director may make any rule which they think fit about how they take decisions, and about how such rules are to be recorded or communicated to directors.
Methods of appointing directors
11. a. Any person who is willing to act as a director, and is permitted by law to do so, may be appointed to be a director—
i. by ordinary resolution, or
ii. by a decision of the director.
b. In any case where, as a result of death, the company has no members and no directors, the personal representatives of the last member to have died have the right, by notice in writing, to appoint a person to be a director.
c. For the purposes of paragraph (b), where two or more members die in circumstances rendering it uncertain who was the last to die, a younger member is deemed to have survived an older member.
Termination of director's appointment
12. A person ceases to be a director as soon as—
a. that person ceases to be a director by virtue of any provision of the Companies Act 2006 or is prohibited from being a director by law;
b. a bankruptcy order is made against that person;
c. a composition is made with that person's creditors generally in satisfaction of that person's debts;
d. a registered medical practitioner who is treating that person gives a written opinion to the company stating that that person has become physically or mentally incapable of acting as a director and may remain so for more than three months; or
e. notification is received by the company from the director that the director is resigning from office, and such resignation has taken effect in accordance with its terms.
Directors' remuneration
13. a. The director may undertake any services for the company that the director decide.
b. The director is entitled to such remuneration as the director determine—
i. for their services to the company as directors, and
ii. for any other service which they undertake for the company.
c. Subject to the articles, a director's remuneration may—
i. take any form, and
ii. include any arrangements in connection with the payment of a pension, allowance or gratuity, or any death, sickness or disability benefits, to or in respect of that director.
d. Unless the director decide otherwise, directors' remuneration accrues from day to day.
e. Unless the director decide otherwise, directors are not accountable to the company for any remuneration which they receive as directors or other officers or employees of the company's subsidiaries or of any other body corporate in which the company is interested.
Directors' expenses
14. The company may pay any reasonable expenses which the directors properly incur in connection with their attendance at—
a. meetings of directors or committees of directors,
b. general meetings, or
c. separate meetings of the holders of any class of shares or of debentures of the company,
or otherwise in connection with the exercise of their powers and the discharge of their responsibilities in relation to the company.
PART 3
SHARES AND DISTRIBUTIONS
SHARES
All shares to be fully paid up
15. a. No share is to be issued for less than the aggregate of its nominal value and any premium payable to the company in respect of that share.
b. This does not apply to shares taken on the formation of the company by the subscribers to the company's memorandum.
One class of shares
16. a. The company has one class of shares, being Ordinary Shares of £_________ each.
b. Each Ordinary Share ranks equally with every other Ordinary Share as to voting, dividends and return of capital.
c. Each Ordinary Share carries the right to receive notice of, attend, speak at and vote at general meetings of the company.
d. On a poll, each Ordinary Share carries one vote.
e. Each Ordinary Share carries the right to participate equally, share for share, in any dividend or other distribution declared or paid by the company, subject to the Companies Act 2006 and these articles.
f. On a winding up or other return of capital, each Ordinary Share carries the right to participate equally, share for share, in the distribution of the surplus assets of the company after payment of the company's liabilities.
Powers to issue different classes of share
17. a. Subject to the articles, but without prejudice to the rights attached to any existing share, the company may issue shares with such rights or restrictions as may be determined by ordinary resolution.
b. The company may issue shares which are to be redeemed, or are liable to be redeemed at the option of the company or the holder, and the directors may determine the terms, conditions and manner of redemption of any such shares, subject to the Companies Act 2006.
Authority to allot shares
18. As the company has only one class of shares, the directors may exercise any power of the company to allot shares of that class, or to grant rights to subscribe for or to convert any security into such shares, in accordance with section 550 of the Companies Act 2006, unless otherwise determined by ordinary resolution or restricted by these articles.
Pre-emption rights on the issue of new shares
19. The statutory pre-emption rights in sections 561 and 562 of the Companies Act 2006 apply, except to the extent they are excluded, disapplied, or modified by the Companies Act 2006, these articles, or a resolution of the company in accordance with the Companies Act 2006.
Company not bound by less than absolute interests
20. Except as required by law, no person is to be recognised by the company as holding any share upon any trust, and except as otherwise required by law or the articles, the company is not in any way to be bound by or recognise any interest in a share other than the holder's absolute ownership of it and all the rights attaching to it.
Share certificates
21. a. The company must issue each member, free of charge, with one or more certificates in respect of the shares which that member holds.
b. Every certificate must specify—
i. in respect of how many shares, of what class, it is issued;
ii. the nominal value of those shares;
iii. that the shares are fully paid; and
iv. any distinguishing numbers assigned to them.
c. No certificate may be issued in respect of shares of more than one class.
d. If more than one person holds a share, only one certificate may be issued in respect of it.
Replacement share certificates
22. a. If a certificate issued in respect of a member's shares is—
i. damaged or defaced, or
ii. said to be lost, stolen or destroyed,
that member is entitled to be issued with a replacement certificate in respect of the same shares.
b. A member exercising the right to be issued with such a replacement certificate—
i. may at the same time exercise the right to be issued with a single certificate or separate certificates;
ii. must return the certificate which is to be replaced to the company if it is damaged or defaced; and
iii. must comply with such conditions as to evidence, indemnity and the payment of a reasonable fee as the directors decide.
Share transfers
23. a. Shares may be transferred by means of an instrument of transfer in any usual form or any other form approved by the directors, which is executed by or on behalf of the transferor.
b. No fee may be charged for registering any instrument of transfer or other document relating to or affecting the title to any share.
c. The company may retain any instrument of transfer which is registered.
d. The transferor remains the holder of a share until the transferee's name is entered in the register of members as holder of it.
e. The directors may refuse to register the transfer of a share, and if they do so, the instrument of transfer must be returned to the transferee with the notice of refusal unless they suspect that the proposed transfer may be fraudulent.
Transmission of shares
24. a. If title to a share passes to a transmittee, the company may only recognise the transmittee as having any title to that share.
b. A transmittee who produces such evidence of entitlement to shares as the directors may properly require—
i. may, subject to the articles, choose either to become the holder of those shares or to have them transferred to another person; and
ii. subject to the articles, and pending any transfer of the shares to another person, has the same rights as the holder had.
c. But transmittees do not have the right to attend or vote at a general meeting, or agree to a proposed written resolution, in respect of shares to which they are entitled, by reason of the holder's death or bankruptcy or otherwise, unless they become the holders of those shares.
Exercise of transmittees' rights
25. a. Transmittees who wish to become the holders of shares to which they have become entitled must notify the company in writing of that wish.
b. If the transmittee wishes to have a share transferred to another person, the transmittee must execute an instrument of transfer in respect of it.
c. Any transfer made or executed under this article is to be treated as if it were made or executed by the person from whom the transmittee has derived rights in respect of the share, and as if the event which gave rise to the transmission had not occurred.
Transmittees bound by prior notices
26. If a notice is given to a member in respect of shares and a transmittee is entitled to those shares, the transmittee is bound by the notice if it was given to the member before the transmittee's name has been entered in the register of members.
DIVIDENDS AND OTHER DISTRIBUTIONS
Procedure for declaring dividends
27. a. Subject to the Companies Act 2006, these articles and the rights attached to any class of shares, the company may by ordinary resolution declare dividends, and the director may decide to pay interim dividends.
b. A dividend declared by ordinary resolution must not exceed the amount recommended by the director.
c. No dividend or other distribution may be declared or paid except out of profits available for distribution in accordance with the Companies Act 2006.
d. Unless the members' resolution to declare or the director' decision to pay a dividend, or the terms on which shares are issued, specify otherwise, dividends must be apportioned and paid in proportion to the amounts paid up on the shares in respect of which the dividend is paid, and according to the rights attached to each class of shares.
Payment of dividends and other distributions
28. a. Where a dividend or other sum which is a distribution is payable in respect of a share, it must be paid by one or more of the means decided by the director, including by transfer to a bank account specified by the distribution recipient, by cheque sent to the distribution recipient, or by any other means agreed with the distribution recipient.
b. In the articles, “the distribution recipient” means, in respect of a share for which a dividend or other sum is payable, the holder of the share, or, if the holder is no longer entitled to the share by reason of death or bankruptcy or otherwise, the transmittee.
No interest on distributions
29. The company may not pay interest on any dividend or other sum payable in respect of a share unless otherwise provided by—
a. the terms on which the share was issued, or
b. the provisions of another agreement between the holder of that share and the company.
Unclaimed distributions
30. a. All dividends or other sums which are payable in respect of shares and unclaimed after having been declared or become payable may be invested or otherwise made use of by the director for the benefit of the company until claimed.
b. The payment of any such dividend or other sum into a separate account does not make the company a trustee in respect of it.
c. If twelve years have passed from the date on which a dividend or other sum became due for payment, and the distribution recipient has not claimed it, the distribution recipient is no longer entitled to that dividend or other sum and it ceases to remain owing by the company.
Non-cash distributions
31. a. Subject to the terms of issue of the share in question, the company may, by ordinary resolution on the recommendation of the director, decide to pay all or part of a dividend or other distribution payable in respect of a share by transferring non-cash assets of equivalent value (including, without limitation, shares or other securities in any company).
b. For the purposes of paying a non-cash distribution, the director may make whatever arrangements they think fit, including, where any difficulty arises regarding the distribution, fixing the value of any assets, paying cash to any distribution recipient on the basis of that value in order to adjust the rights of recipients, and vesting any assets in trustees.
Waiver of distributions
32. Distribution recipients may waive their entitlement to a dividend or other distribution payable in respect of a share by giving the company notice in writing to that effect.
CAPITALISATION OF PROFITS
Authority to capitalise and appropriation of capitalised sums
33. a. Subject to the articles, the director may, if they are so authorised by an ordinary resolution—
i. decide to capitalise any profits of the company (whether or not they are available for distribution) which are not required for paying a preferential dividend, or any sum standing to the credit of the company's share premium account or capital redemption reserve; and
ii. appropriate any sum which they so decide to capitalise (a “capitalised sum”) to the persons who would have been entitled to it if it were distributed by way of dividend (the “persons entitled”) and in the same proportions.
b. Capitalised sums must be applied on behalf of the persons entitled and in the same proportions as a dividend would have been distributed to them.
c. Any capitalised sum may be applied in paying up new shares of a nominal amount equal to the capitalised sum which are then allotted credited as fully paid to the persons entitled or as they may direct.
PART 4
DECISION-MAKING BY MEMBERS
Attendance and speaking at general meetings
34. a. A person is able to exercise the right to speak at a general meeting when that person is in a position to communicate to all those attending the meeting, during the meeting, any information or opinions which that person has on the business of the meeting.
b. A person is able to exercise the right to vote at a general meeting when that person is able to vote, during the meeting, on resolutions put to the vote at the meeting, and that person's vote can be taken into account in determining whether or not such resolutions are passed at the same time as the votes of all the other persons attending the meeting.
c. The directors may make whatever arrangements they consider appropriate to enable those attending a general meeting to exercise their rights to speak or vote at it, including by means of remote communication; and a person is able to attend a general meeting by such means even if not in the same place as any other person attending.
Quorum for general meetings
35. No business other than the appointment of the chairman of the meeting is to be transacted at a general meeting if the persons attending it do not constitute a quorum. Subject to section 318 of the Companies Act 2006, the quorum for a general meeting is the holders of at least _________ percent of the voting shares of the company, present in person or by proxy and entitled to vote, and in any event not fewer than two qualifying persons.
Chairing general meetings
36. a. If the directors have appointed a chairman, the chairman shall chair general meetings if present and willing to do so.
b. If the directors have not appointed a chairman, or if the chairman is unwilling to chair the meeting or is not present within ten minutes of the time at which a meeting was due to start—
i. the directors present, or
ii. (if no directors are present), the meeting,
must appoint a director or member to chair the meeting, and the appointment of the chairman of the meeting must be the first business of the meeting.
Attendance and speaking by directors and non-members
37. a. Directors may attend and speak at general meetings, whether or not they are members.
b. The chairman of the meeting may permit other persons who are not members of the company, or otherwise entitled to exercise the rights of members in relation to general meetings, to attend and speak at a general meeting.
Adjournment
38. a. If the persons attending a general meeting within half an hour of the time at which the meeting was due to start do not constitute a quorum, or if during a meeting a quorum ceases to be present, the chairman of the meeting must adjourn it.
b. The chairman of the meeting may adjourn a general meeting at which a quorum is present if the meeting consents to an adjournment, or it appears to the chairman of the meeting that an adjournment is necessary to protect the safety of any person attending the meeting or to ensure that the business of the meeting is conducted in an orderly manner.
c. When adjourning a general meeting, the chairman of the meeting must either specify the time and place to which it is adjourned or state that it is to continue at a time and place to be fixed by the directors, and have regard to any directions as to the time and place of any adjournment which have been given by the meeting.
VOTING AT GENERAL MEETINGS
Voting: general
39. A resolution put to the vote of a general meeting must be decided on a show of hands unless a poll is duly demanded in accordance with the articles. Subject to any rights or restrictions attached to any shares, on a show of hands every member present in person or by proxy has one vote, and on a poll every member present in person or by proxy has one vote in respect of each share held by that member.
Errors and disputes
40. a. No objection may be raised to the qualification of any person voting at a general meeting except at the meeting or adjourned meeting at which the vote objected to is tendered, and every vote not disallowed at the meeting is valid.
b. Any such objection must be referred to the chairman of the meeting, whose decision is final.
Poll votes
41. a. A poll on a resolution may be demanded in advance of the general meeting where it is to be put to the vote, or at a general meeting, either before or on the declaration of the result of a show of hands.
b. A poll may be demanded by the chairman of the meeting, the directors, two or more persons having the right to vote on the resolution, or a person or persons representing not less than one tenth of the total voting rights of all the members having the right to vote on the resolution.
c. A demand for a poll may be withdrawn if the poll has not yet been taken and the chairman of the meeting consents to the withdrawal.
d. Polls must be taken immediately and in such manner as the chairman of the meeting directs.
Content of proxy notices
42. a. Proxies may only validly be appointed by a notice in writing which states the name and address of the member appointing the proxy, identifies the person appointed to be that member's proxy and the general meeting in relation to which that person is appointed, is signed by or on behalf of the member appointing the proxy, and is delivered to the company in accordance with the articles and any instructions contained in the notice of the general meeting.
b. The company may require proxy notices to be delivered in a particular form, and may specify different forms for different purposes.
Delivery of proxy notices
43. a. A person who is entitled to attend, speak or vote (either on a show of hands or on a poll) at a general meeting remains so entitled in respect of that meeting or any adjournment of it, even though a valid proxy notice has been delivered to the company by or on behalf of that person.
b. An appointment under a proxy notice may be revoked by delivering to the company a notice in writing given by or on behalf of the person by whom or on whose behalf the proxy notice was given.
c. A notice revoking a proxy appointment only takes effect if it is delivered before the start of the meeting or adjourned meeting to which it relates.
Amendments to resolutions
44. a. An ordinary resolution to be proposed at a general meeting may be amended by ordinary resolution if notice of the proposed amendment is given to the company in writing by a person entitled to vote at the general meeting at which it is to be proposed not less than 48 hours before the meeting is to take place, and the proposed amendment does not, in the reasonable opinion of the chairman of the meeting, materially alter the scope of the resolution.
b. A special resolution to be proposed at a general meeting may be amended by ordinary resolution if the chairman of the meeting proposes the amendment at the general meeting at which the resolution is to be proposed, and the amendment does not go beyond what is necessary to correct a grammatical or other non-substantive error in the resolution.
PART 5
ADMINISTRATIVE ARRANGEMENTS
Means of communication to be used
45. a. Subject to the articles, anything sent or supplied by or to the company under the articles may be sent or supplied in any way in which the Companies Act 2006 provides for documents or information to be sent or supplied by or to the company.
b. Subject to the articles, any notice or document to be sent or supplied to a director in connection with the taking of decisions by directors may also be sent or supplied by the means by which that director has asked to be sent or supplied with such notices or documents for the time being.
c. A director may agree with the company that notices or documents sent to that director in a particular way are to be deemed to have been received within a specified time of their being sent, and for the specified time to be less than 48 hours.
Company seals
46. a. Any common seal may only be used by the authority of the director.
b. The director may decide by what means and in what form any common seal is to be used.
c. Unless otherwise decided by the director, if the company has a common seal and it is affixed to a document, the document must also be signed by at least one authorised person in the presence of a witness who attests the signature.
No right to inspect accounts and other records
47. Except as provided by law or authorised by the directors or an ordinary resolution of the company, no person is entitled to inspect any of the company's accounting or other records or documents merely by virtue of being a member.
Provision for employees on cessation of business
48. The director may decide to make provision for the benefit of persons employed or formerly employed by the company or any of its subsidiaries (other than a director or former director or shadow director) in connection with the cessation or transfer to any person of the whole or part of the undertaking of the company or that subsidiary.
DIRECTORS' INDEMNITY AND INSURANCE
Indemnity
49. a. Subject to paragraph (b), a relevant director of the company or an associated company may be indemnified out of the company's assets against—
i. any liability incurred by that director in connection with any negligence, default, breach of duty or breach of trust in relation to the company or an associated company,
ii. any liability incurred by that director in connection with the activities of the company or an associated company in its capacity as a trustee of an occupational pension scheme (as defined in section 235(6) of the Companies Act 2006),
iii. any other liability incurred by that director as an officer of the company or an associated company.
b. This article does not authorise any indemnity which would be prohibited or rendered void by any provision of the Companies Acts or by any other provision of law.
c. In this article, companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate, and a “relevant director” means any director or former director of the company or an associated company.
Insurance
50. a. The directors may decide to purchase and maintain insurance, at the expense of the company, for the benefit of any relevant director in respect of any relevant loss.
b. In this article, a “relevant director” means any director or former director of the company or an associated company; a “relevant loss” means any loss or liability which has been or may be incurred by a relevant director in connection with that director's duties or powers in relation to the company, any associated company or any pension fund or employees' share scheme of the company or associated company; and companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate.
