Your articles of association shape the way your business operates and outline any safeguards necessary to protect your interests. You can rely on standard articles – either implied by law or provided to you as part of the company formation process if you purchased your company off the shelf – or have a bespoke set of articles drafted for you.
Matters typically covered include:
- the procedure for appointing and removing directors;
- directors’ rights and responsibilities;
- decision making provisions for directors’ board meetings including what to do if there is a conflict of interest;
- calculation and payment of dividends;
- shareholders’ meeting procedure, voting rights and responsibilities,
- share arrangements, including issue of new shares, allocation, sale or transfer;
- provisions for departure of a shareholder; and
- situations where restructuring or forced sale may be required.
If the circumstances have changed since your company was formed it may be advisable to review your articles, as it is possible to amend them if 75 per cent of your shareholders vote in favour of doing so.