What Are Articles of Association?

Articles of association are a company’s internal rulebook. They define how the business is structured, how decisions are made, and how responsibilities are distributed among shareholders, directors, and managers. These articles serve as a legally binding agreement between the company and its stakeholders, guiding everything from voting rights to equity transfers.

Most of the time, articles of association are a required part of the company registration process. They act as a governance framework, ensuring that day-to-day operations and major decisions are handled in a transparent and legally compliant way. While the specific contents can vary depending on local laws and company needs, the goal is always the same: to create clarity and accountability within the organization.

Memorandum and Articles of Association

While the articles of association lay out how a company operates internally, the memorandum of association defines its external identity at the time of incorporation. Both documents are often submitted together when registering a new company, especially in jurisdictions like the UK or Hong Kong. Together, they form the core constitutional documents of a company.

The memorandum of association is typically short and straightforward. It includes basic details such as the company’s name, its registered office, and a declaration from the founding shareholders that they agree to form the company. Once the company is incorporated, the memorandum usually remains static and doesn’t need to be updated.

On the other hand, the articles of association are dynamic. They can be amended over time to reflect changes in ownership, governance structure, or business strategy. The two documents work hand in hand, one establishing the company’s existence, the other shaping how it actually functions.

Key Sections of Articles of Association

1. General Provisions

This section outlines the overall purpose of the articles of association, which is to define how the company will be governed. It establishes that the rules within the document are binding for both the company and its stakeholders, forming a legal contract between them.

2. Legal Supremacy Clause

Here, it’s clarified that if there’s ever a conflict between the articles and other internal policies, the articles take precedence. This clause ensures that the articles remain the highest authority in the company’s governance structure, unless overridden by applicable laws.

3. Company Information

In this part, you’ll include the general information such as:

• Company Name
• Company Address
• Business Scope
• Business Period

4. Capital and Shareholders

The registered capital section shows how much money is being committed to the company by its shareholders. It’s not necessarily about how much cash is in the bank on day one, but more about the declared value that shareholders are liable for. In many jurisdictions, you can register a fairly low capital amount to start, but it still needs to be realistic and aligned with your business plans.

Shareholder details go a bit deeper. You’ll list out the:

• Names
• Contribution Dates
• Method of Contribution
• Capital Contribution Amount
• Shareholder Responsibilities

Shareholder responsibilities includes duties like making their contributions on time and participating in decision-making when required through shareholder resolutions.

5. Corporate Governance Structure

There are a few important part in a company’s structure:

5.1. Shareholder Committee: Where major decisions are made, like [resolution on annual surplus], change in company’s management, approving large transactions, or amending the company’s core documents. The articles define the committee’s:

• Powers: Can approve mergers, amend the articles, appoint or remove directors, and make other high-level decisions.
• Meeting Types and Rules: Includes both regular and ad hoc meetings, with rules for notice periods, quorum, and attendance.
• Voting Methods: Usually based on shareholding; outlines whether majority or supermajority is needed.
• First Meeting Convening: Details how the first shareholder meeting is initiated and what’s decided there.
• Special Resolutions: Applies to significant changes like dissolution or capital restructuring; may allow circular resolutions for efficiency.

5.2. Executive Director: Who leads the company’s day-to-day operations and serves as its central authority figure. The responsibilities includes:

• Role and Term: Appointed for a fixed period, with the option for renewal.
• Powers and Responsibilities: Includes signing contracts, managing finances, overseeing staff, and executing shareholder decisions.

5.3. Company Management: Typically refers to the general manager or similar operational role who executes strategy and ensures the business runs according to plan.

• Manager Role: Reports to the executive director and handles day-to-day workflows.
• Powers and Responsibilities: Supervises staff, manages resources, and implements company policies.

5.4. Supervisory Director: Provides an internal layer of oversight, especially in areas like compliance, risk, and financial control.

• Term: Often serves a multi-year term, with periodic review.
• Powers and Oversight Responsibilities: Monitors executive decisions, reviews financial practices, and ensures accountability.

6. Equity Transfers

This section defines how company shares can be transferred, both internally (between existing shareholders) and externally (to outside parties). It helps ensure transparency, protects the company from unwanted ownership changes, and outlines the approval process for each scenario.

• Internal Equity Transfers: Typically allowed with minimal restrictions, though the company may require formal notice or board approval. The goal is to maintain clarity and keep records accurate.
• External Equity Transfers and Conditions: Usually subject to stricter rules. New shareholders often need approval from the shareholder committee or a supermajority vote. This clause may also include a right of first refusal, giving existing shareholders the option to buy the shares before outsiders do.

7. Company Dissolution

Even well-run companies may eventually wind down, and this section outlines how that process is handled. It covers both voluntary and involuntary dissolution, ensuring that all parties know what to expect if the company ever reaches its endpoint.

Dissolution and liquidation procedures defines the steps for dissolving the company, including who can propose it (often the shareholder committee) and what level of approval is needed. Also outlines how remaining assets are liquidated, debts are settled, and final filings are submitted to authorities.

Circular Resolution - Dissolution of Ltd.

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8. Administrative Matters

Last but certainly not the least, teh administrative matters. This section handles the procedural side of company governance, things that might not make headlines but are essential for staying compliant and organized. This includes:

• Approval and Filing Requirements: Outlines which company actions (like amendments or appointments) need to be filed with local authorities or approved by shareholders or directors.
• Document Copying and Submission Requirements: Specifies how and when copies of key documents (e.g. meeting minutes, resolutions, financial statements) must be shared or submitted internally or externally.
• Signature Blocks of Parties Involved: Includes the required signatures to make the articles legally binding. This typically covers the shareholders or their authorized representatives.

Amending Your Company’s Articles of Association

Companies don’t stay static; they grow, shift, and occasionally do a full 180. New shareholders come on board, leadership evolves, and strategic plans pivot. That’s why your articles of association shouldn’t be carved in stone. This section breaks down when it’s time for a tune-up and how to do it by the book.

When and Why to Amend

Not every little tweak in the business needs a formal update, but some changes are big enough to demand it. The usual suspects? A shake-up in shareholding, a shiny new company name, changes to your business scope, or a revamped governance structure. Bringing in a supervisory board, changing up voting rights, or syncing with new legal regulations? Yep, those are solid reasons too.

Circular Resolution - Remedy of Deficiencies in the Company’s Purpose

A resolution to address defects in your company’s purpose is essential when there are inconsistencies or errors in your company’s objectives as stated in the articles of association. These defects can create legal complications if not addressed promptly. By using a circular resolution, you can efficiently correct these issues without needing a formal meeting, ensuring your company stays compliant with its legal framework.

Using our circular resolution template for rectification of defects in the company’s purpose, you can easily and quickly draw a resolution proposal, send it to all shareholders, and collect their votes and signatures electronically.

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Keeping your articles updated is about keeping your internal playbook enforceable. Relying on outdated rules can slow things down or spark legal headaches, especially when you’re courting new investors or under the microscope during due diligence.

Legal Requirements and Filing Procedures

Amending your articles isn’t just a casual group chat decision. It usually requires a special resolution, backed by a supermajority, typically two-thirds or 75% of the voting power. The exact threshold depends on your jurisdiction, but either way, this isn’t a one-person show.

Once everyone’s on board, the changes need to be locked in. They’re documented, signed, and filed with your local corporate registry. Some places even demand a public announcement to seal the deal. Skip a step, and your shiny new rules might not hold up in practice, so dot every “i” and cross every “t.”

What Happens to the Articles of Association in Case of Sole Shareholder?

When a company has just one shareholder, the articles of association still apply, nothing about their legal necessity disappears.

The difference is how the provisions are applied, not whether they’re required.

Here’s what changes (and what doesn’t):

• No need for shareholder meetings: Since there’s only one person holding all the voting power, formal meetings aren’t really needed. However, any decisions that would typically be made by a shareholder committee still need to be recorded in writing—often in the form of resolutions by the sole shareholder.
• Voting procedures become formalities: Clauses about voting thresholds and quorums technically still exist in the articles, but with one shareholder, every decision passes automatically. Still, it’s good practice (and often a legal requirement) to keep records of these decisions for audit and compliance purposes.
• Executive roles may still be separate: Even if one person wears all the hats—shareholder, executive director, and manager—the articles still outline each role’s function. This distinction becomes important if other shareholders are added later or in legal scenarios like liability or succession planning.

Free Articles of Association Templates

Creating a solid articles of association document from scratch can be time-consuming, and frankly, a little intimidating. That’s why we’re offering a ready-to-use template that mirrors real-world legal standards and covers everything from shareholder voting to company dissolution.

This free template includes structured chapters, placeholder fields for shareholder data, and legally sound clauses drafted in line with company law. It’s ideal for new incorporations or companies going through restructuring. You can easily customize it to fit your jurisdiction, governance setup, and business scope without needing to reinvent the wheel.

To make things even smoother, the template is available directly in our contract management app, which gives you access to:

• Customizable templates with dynamic fields
• Legally compliant clauses aligned with company law
• Customizable templates with dynamic fields that adapt to your company structure
• Electronic signatures that support SES, AES, and QES standards
• AI-powered review playbooks that flag risks and inconsistencies before you hit “send”

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