How to amend a company’s articles of association

Updating your company’s articles of association might sound technical, but the process is usually quite straightforward once you understand the basics. In simple terms, you’ll need approval from your shareholders (at least 75% of the votes must be cast in favour), and then you must file the updated documents with Companies House within 15 days. 

Your articles of association are the key rulebook for how your company is run. They set out how decisions are made, how shares work, and the responsibilities of directors.  

While many businesses stick with the standard Model Articles when they start, these don’t always suit a growing or changing company. The good news is you can update them whenever you need to, so long as you follow the correct process.

Reasons to amend your articles of association

There are many reasons why you may want to amend your company’s articles of association, and sometimes you may be forced to make changes by new legislation.  

These are a few reasons why you might adapt the Model Articles, of which we have listed 3 examples below. 

Shareholder transfers

Companies with more than one shareholder may choose to amend the articles to control the way shares are transferred from one shareholder to another. This can protect you as a founder by giving you more of a say about the people who are a part of your company. 

You may want to amend the articles to restrict share transfers or to include compulsory transfer clauses. Similarly, it can be helpful to have drag-along rights and tag-along rights to make all shareholders aligned when it comes to the sale of the company. 

Introducing multiple share classes

Under the Model Articles, the default position is that all shares are ‘ordinary’ shares, and the Model Articles aren’t generally suitable for companies that want more than one share class. 

This can be a problem when you have shareholders with different roles in the business. Some shareholders may have very little involvement with the business, whereas other shareholders (who are also directors) might be involved in the day-to-day running of the business. So, you may want some shareholders to have shares with no decision-making powers.  

You may also want to be able to issue preferential shares to certain investors, so that they see a return on their investment quickly.  

Different classes of shares carry different rights. Preferential shares give preferential treatment on dividends. Other classes provide enhanced voting powers, such as weighted votes or veto powers.  

By way of illustration, you might end up with: 

• Investor shares with limited voting rights 
• Shares with priority dividends 
• Shares with extra voting power for founders 

Growing businesses often need this level of flexibility and adaptability. Amending the articles of association can help make this happen. 

Provisions for a sole director

The Model Articles state that a minimum of two directors is required for decision-making. If you’re the only director in the business, this can create uncertainty. 

For a belt and braces approach, it’s often best to amend the Model Articles to make clear that a single director makes decisions on behalf of the company. 

Steps to approve changes through a special resolution

You can amend a company’s articles of association by passing a special resolution of the members.  

This type of resolution requires a majority of at least 75% of the total votes, and it can be passed either (i) as a written resolution that is signed by the shareholders, or (ii) by casting votes at a general meeting of the shareholders. 

Written resolutions for amendments

A written resolution is often the quickest and most convenient option for smaller companies because there is no need to arrange and attend a general meeting, which can be time-consuming.  

Each member will simply be provided with a copy of the updated articles to review and the written resolution itself. If they are happy with the changes, they will provide their approval by signing the resolution. 

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A copy of the special resolution should be delivered to Companies House within 15 calendar days of being passed, together with a copy of the new articles of association. 

General meetings and special resolutions

When a written resolution is unsuitable, which is often the case when companies have large memberships, you can amend a company’s articles of association by passing a special resolution at a general meeting.  It is also possible for shareholders to propose the amendment themselves, although usually it is the directors that propose it. 

There are several steps required to pass a special resolution at a general meeting:

1. Hold a board meeting

First, hold a board meeting to discuss the reasons for the change, and to agree the wording of the proposed changes to the articles. You should also agree the wording of the proposed resolution.  

As always, keep careful minutes of this meeting so you have a robust paper trail of the decisions that were made and why.  

Note that you can also agree to propose the change through written resolution of the directors. 

2. Seek approval from the members

The directors send notice of the meeting to all members at least 14 clear calendar days in advance, stating the time, date, place, and purpose of the meeting. 

The members attend the general meeting, discuss the proposed changes and the resolution, and provide their votes by way of a poll or show of hands. 

If a majority of at least 75% of votes are cast in favour of the proposed changes, the resolution is passed. In some cases, you may also need shareholder class consent. 

As mentioned above, it is also possible for the members to approve the resolution by written resolution, removing the need to hold a meeting. 

3. File the special resolution and new articles with Companies House

The directors send a certified copy of the special resolution to Companies House, accompanied by a copy of the amended articles, within 15 calendar days of the date of the resolution passing. 

4. Maintain records internally

Copies of the amended articles and special resolution should be sent to every director and the company auditor (if you have one). 

The company must also retain minutes of the meeting that passed the resolution, and a copy of the resolution. 

Best practices for maintaining current articles of association

Your articles of association shouldn’t just sit untouched after you set up your business. Keeping them up to date can help you avoid disputes, attract investors, and run your company more smoothly.  

Treat your articles as a living document that grows with your business, not just a legal formality. Before you make any changes to your articles, we recommend seeking professional legal advice from a specialist business solicitor. 

For comprehensive guidance on maintaining legally compliant company documentation, please visit the Quality Company Formations blog. Alternatively, if you want to create your own resolution for shareholders relating to the adoption of articles of association, you can access a template as part of Quality Company Formation‘s Business Document Template Library.