There were 890,684 company incorporations in the UK during the financial year ending 31 March 2024. When you register a company with Companies House − the government agency responsible for registering and maintaining records of companies and limited partnerships − there are two key documents required as part of the incorporation process. These are the memorandum of association and articles of association.
But what exactly is the meaning of a memorandum of association? Why is this legal document required at all? How does it differ from the articles of association? When would a company’s memorandum of association be of use after company formation?
Understanding the memorandum of association contents required by Companies House in the UK is essential for successful company formation. This article will assist in answering these and other related questions to help UK companies and those looking to form a company understand the purpose and legal significance of these specific documents.
What is a company’s memorandum of association?
The Collins dictionary definition of memorandum of association is: It is a legal document needed to officially form a new company, which gives details of its name, activities, managers, share capital, and so on. As mentioned, to be registered at Companies House, every company formed in the UK must submit one.
Since a company, once created, is treated legally as a separate legal entity, it is necessary for people to either own and/or operate the company.
When a company is newly formed, there will be one or more people who will agree to form the company and become a member. These first members are commonly known as subscribers or shareholders.
In the past, a company would list all of its ‘objects’, which were essentially a list of purposes for which the company would operate.
However, today, a company’s memorandum of association (for UK companies) only needs to state (at a minimum) the following:
- That the subscribers wish to form a company under the Companies Act 2006 of the United Kingdom; and
- That the subscribers agree to become members of the company and, in the case of a company that is to have a share capital, to take at least one share each in the company’s share capital.
Interestingly, the explanatory notes to the Companies Act 2006 of the United Kingdom provide the following information regarding a company’s memorandum of association:
“Under the Act, the memorandum serves a more limited, but nonetheless important, purpose: it evidences the intention of the subscribers to the memorandum to form a company and become members of that company on formation. In the case of a company that is to be limited by shares, the memorandum will also provide evidence of the members’ agreement to take at least one share each in the company.”
The role of subscribers in memorandum of association UK companies is fundamental. They are the founding members who form the legal foundation of the company by subscribing to the memorandum of association, signalling their consent to be members and facilitating registration with Companies House.
Types of UK companies and their memorandum requirements
When you form a company in the UK, it’s important to understand that different types of limited companies – such as those limited by shares versus those limited by guarantee − have slightly different memorandum of association requirements.
Company limited by shares
The most common type of new company in the UK is a company limited by shares. For these companies, the memorandum of association must confirm that each subscriber agrees to become a member and take at least one share in the company’s share capital. The memorandum will specify the initial share structure, though it doesn’t need to detail different classes of shares or share classes (this information is typically contained in the articles of association).
Company limited by guarantee
Alternatively, a company limited by guarantee doesn’t have share capital. Instead, each member acts as a guarantor and agrees to contribute a guaranteed amount (usually £1) if the company is wound up. This structure is commonly used by charities, clubs and membership organisations. For companies limited by guarantee, the memorandum of association must state that each subscriber agrees to become a member and, if necessary, to contribute the guaranteed amount to the company’s assets if it’s dissolved.
Memorandum of association vs articles of association: What’s the difference?
A company’s memorandum of association can, in many ways, be characterised as its ‘formation’ document. On the other hand, a company’s articles of association are both a ‘formation and continuing’ guideline in the sense that they contain the rules agreed for the operation of the company and, in particular, the relationship between a company’s directors and shareholders.
For example, a company’s articles of association will typically outline and regulate (amongst other things) the following aspects of a company:
- The manner of appointment, retirement, rotation and removal of company directors;
- Procedural requirements for matters such as shareholder or board meetings, share transfer and share capital transactions in general; and
- In certain instances, the articles include a list commonly referred to as ‘shareholder reserved matters.’ These are specific matters and decisions that can only be approved by a certain percentage of shareholders’ voting rights and fall outside the operational authority of the board of directors − for example, approving name changes, certain share capital transactions and the liquidation of the company.
What are model articles in relation to articles of association?
Model articles are standard template articles of association provided by Companies House under the Companies Act 2006. Every company can choose to adopt these model articles without modification, or they can draft bespoke articles tailored to their specific needs.
The model articles cover all the essential rules for running a limited company, including:
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- Appointment and removal of company directors
- Decision-making procedures for directors and shareholders
- Share transfers and shareholder approval requirements
- Meeting procedures and voting rights
- Different classes of shares (if applicable)
Model articles, freely available via the GOV.UK website, suit most straightforward company formations with no drafting costs and automatic legislative updates. However, bespoke articles may be needed for companies with specific share classes, shareholder reserved matters, transfer restrictions, or complex ownership structures.
Either way, articles work alongside your memorandum of association to form the company’s constitutional framework.
How to draft a memorandum of association for a UK company in 5 simple steps
When you register a company with Companies House, drafting the memorandum of association is a straightforward process, as every company must use the prescribed format under the Companies Act 2006.
Step 1: Gather required information
Before you form a company online or submit paper forms, you’ll need the following information:
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- Full names and addresses of all subscribers (the first members of the company).
- The type of company you’re forming (limited by shares or limited by guarantee).
- Confirmation that each subscriber will take at least one share (for companies with share capital).
- The company name you’ve chosen.
- The registered office address in the UK.
Step 2: Use the prescribed form
Memorandum of association requirements under the Companies Act 2006 UK include using a standard Companies House template as part of the incorporation application. You can’t create your own bespoke memorandum of association format; every company formed in the UK must use the prescribed form. For most private limited companies, this will be included in form IN01 (application to register a company). A sample memorandum of association for a company limited by shares is as follows:
Step 3: Ensure all subscribers sign
Each subscriber must personally sign the memorandum of association. This legal document evidences their agreement to form the company and become a member upon incorporation.
Step 4: Submit to Companies House
The memorandum of association must be submitted to Companies House as part of your company formation application. You can register a company online through the Companies House website or submit paper forms by post. Note that it costs £71 to send a paper application to register a private or public company, while the WebFiling service is £15.
What must be submitted to Companies House?
To form a company, the following documents must be submitted to Companies House:
- Memorandum of association signed by all subscribers.
- Articles of association (either adopting model articles or submitting bespoke articles).
- Form IN01, which serves as the application to register a company.
Step 5: Wait for approval
Once your application is approved and the company is registered at Companies House, the memorandum becomes a permanent record of the company’s formation.
Once submitted to Companies House, the registration processing times are currently as follows:
- Online applications: Usually processed within 24 hours on business days.
- Postal applications: Typically processed within 8−10 days.
After registration, you can access your company information on the Companies House website. Both the memorandum and articles of association become public documents once registered at Companies House. Anyone can view or download these documents for any UK company through the Companies House website for a small fee.
Post-incorporation filing requirements
After your company is formed, you must notify Companies House within 15 days of certain changes, including:
- Changes to company directors or their details
- Changes to the registered office
- Allotment of new shares
- Amendments to articles of association (via special resolution)
Your company must also keep copies for its own records, including:
- A copy of the memorandum of association (historical document)
- Current articles of association
- Register of members showing all shareholders
- Register of company directors
- Details of share classes and shareholdings
These records must be available for inspection and some information must be filed annually with Companies House in the confirmation statement.
Common mistakes to avoid
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- Forgetting to include all required subscriber information.
- Using an old-style memorandum format with objects clauses (no longer required for new companies).
- Failing to obtain proper signatures from all subscribers.
- Not keeping a copy for the company’s records.
Amending your memorandum and articles of association
Once a company is formed and registered at Companies House, you may need to change the articles of association as your business evolves. Under current law, the memorandum of association can’t be amended after incorporation and it remains as a historical record of the first members’ agreement. However, any provisions in an old-style memorandum are automatically treated as part of the articles of association and can be amended following the correct procedure.
How to change the articles of association
A company must follow this process to amend its articles:
- Pass a special resolution
To change the articles, shareholders must pass a special resolution. This requires:
- At least 75% of voting shareholders to vote in favour.
- Proper notice of the meeting (usually 14 days for private limited companies).
- The proposed changes to be clearly set out.
- Obtain shareholder approval
The special resolution provides the necessary shareholder approval to make constitutional changes. The company must ensure that the amended articles don’t conflict with the Companies Act 2006 or other legislation.
- File with Companies House within 15 days
Once the special resolution is passed, the company must:
- Submit the amended articles of association to Companies House.
- File form SH19 (notice of special resolution).
- Complete this within 15 days of passing the resolution.
Failure to file within this timeframe may result in penalties for the company and its directors.
The ongoing purpose of a company’s memorandum of association
So, from the above, it’s clear that the current purpose of a company’s Memorandum of Association is in many ways a pre-incorporation procedural formality.
But does a company’s memorandum of association have any subsequent or useful purpose once a company has, in fact, been incorporated?
The answer will, in many ways, depend on whether a company has an ‘old-style’ or ‘new-style’ memorandum of association.
For example, if a company has an ‘old style’ memorandum of association (i.e. with a list of the company’s permitted activities, known as ‘objects clauses’), then third parties or authorities dealing with the company may very well want to see such a document to see if the company has the requisite scope within its objects clauses to carry out any particular proposed activity domestically or internationally.
On the other hand, for a company with a ‘new style’ memorandum of association, it won’t have any specific company objects within its memorandum. Instead, it will have unrestricted objects (meaning that its objects will be anything that is legal/permissible to be carried out by a company).
This is also reinforced by the following section contained within the Companies Act 2006:
“31 Statement of company’s objects:
(1)Unless a company’s articles specifically restrict the objects of the company, its objects are unrestricted.”
Why you may require the services of a notary in relation to a company’s memorandum of association
If a United Kingdom company is planning to conduct business in an overseas jurisdiction (for example, the incorporation of a new subsidiary, branch or representative office outside of the UK), then the authorities in the specific jurisdiction may request a notarised (and, in certain instances, apostilled and/or legalised) copy of the company’s memorandum of association.
In such instances, the services of a notary public may be required in order to complete the necessary certification.
Importantly, however, it may be important to check whether the memorandum is an ‘old style’ or ‘new style’ memorandum as – technically speaking – all provisions which are not of the type referred to in the blog section titled ‘What is a company’s memorandum of association?’ will automatically as a matter of law form the company’s articles of association.
Conclusion
Every company formed in the UK must submit a duly authenticated memorandum of association to Companies House as part of the incorporation process. This legal document confirms:
- That the subscribers wish to form a company under the Companies Act 2006; and
- That the subscribers agree to become a member and, in the case of a company limited by shares, to take at least one share each in the company’s share capital.
While the memorandum and articles of association serve different purposes, both are essential documents for company formation. The memorandum evidences the formation intent of the first members, while the articles of association govern the ongoing operation and management of limited companies. Whether you’re planning to register a company online or need to amend your existing articles through a special resolution, understanding these constitutional documents is crucial for all UK companies.
Need notarisation services for overseas business?
Should you require your company’s memorandum and/or articles of association to be notarised, apostilled or legalised for use outside of the United Kingdom, please call us at: 020 7630 1777 or send an email to: info@notary.co.uk. At Notary.co.uk, we’re happy to be of assistance.
FAQs
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What is a memorandum of association?
It’s a legal document required to form a UK company that confirms that subscribers wish to create a company under the Companies Act 2006 and agree to become members.
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Can you amend a memorandum of association after incorporation?
No. The memorandum can’t be amended after incorporation and remains as a historical record of the company’s formation and first members’ agreement.
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What’s the difference between a memorandum and articles of association?
The memorandum is a formation document confirming intent to create a company. Articles of association contain the ongoing rules for operating the company and relationships between directors and shareholders.
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Do I need to use a specific format for the memorandum?
Yes. Every UK company must use the prescribed format provided by Companies House under the Companies Act 2006. You can’t create a bespoke format.
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How long does it take to register a company with Companies House?
Online applications are usually processed within 24 hours on business days. Postal applications typically take 8−10 days to process.