{"id":182,"date":"2026-07-10T04:19:28","date_gmt":"2026-07-10T04:19:28","guid":{"rendered":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/?p=182"},"modified":"2026-07-10T04:19:38","modified_gmt":"2026-07-10T04:19:38","slug":"your-companys-rulebook-model-articles-vs-smart-formations-house-articles","status":"publish","type":"post","link":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/your-companys-rulebook-model-articles-vs-smart-formations-house-articles\/","title":{"rendered":"Your company\u2019s rulebook: Model Articles vs Smart Formations\u2019 House Articles"},"content":{"rendered":"
\n
\n

Important disclaimer<\/h2>\n

This article is general information about UK company law and company formation practice. It is not legal, tax or accounting advice, and it does not take account of any particular company\u2019s facts, ownership structure or commercial objectives. Specific advice should be taken before adopting bespoke Articles of Association, creating multiple share classes, using partly paid shares, bringing in outside investors, or agreeing a shareholders\u2019 agreement.<\/p>\n<\/p><\/div>\n

Key definitions<\/h2>\n

Articles of association:<\/strong> the company\u2019s internal rules. In the same way that a social club, sports club, or other members\u2019 organisation runs by a set of rules, a company runs by its Articles of Association. Under section 33 of the Companies Act 2006, the company\u2019s constitution binds the company and its members as if there were covenants on the part of the company and of each member to observe those provisions.<\/p>\n

Model articles:<\/strong> the standard default articles prescribed for private companies limited by shares under the Companies (Model Articles) Regulations 2008 and published by GOV.UK for companies incorporated on or after 28 April 2013.<\/p>\n

House Articles:<\/strong> a formation agent\u2019s own standard, in\u2011house set of Articles of Association used across many incorporations. They are not necessarily bespoke to any one client.<\/p>\n

Special resolution:<\/strong> a shareholder resolution requiring a 75% majority for matters such as amending the Articles of Association.<\/p>\n

Ordinary resolution:<\/strong> a shareholder resolution passed by a simple majority.<\/p>\n

Shareholder:<\/strong> the holder of shares in the company.<\/p>\n

\n
Articles of association at a glance<\/div>\n
    \n
  • Every limited company must have Articles of Association, and the Model Articles are the government\u2019s standard default set.<\/li>\n
  • Founders can keep the Model Articles or adopt alternative Articles of Association. Any alternative or bespoke Articles should be checked carefully for compliance with the relevant requirements of the Companies Act 2006, because Companies House does not review them for legal effectiveness as part of the filing process.<\/li>\n
  • Smart Formations offers its own standard House Articles as that alternative.<\/li>\n
  • Smart Formations\u2019 House Articles follow the Model Articles closely but adjust a small number of practical points, including sole\u2011director decision\u2011making, own\u2011share purchases, conflicts, tied board votes, and quorum issues at adjourned shareholder meetings.<\/li>\n<\/ul><\/div>\n

    Introduction<\/h2>\n

    Every company runs on a set of rules, just as a sports or social club does. A club\u2019s rules dictate who joins, who takes part, what happens when members fall out, and what to do with any surplus once membership fees, bar takings, and other income have covered the annual costs. A company has the same issues in a different setting. Its rulebook is called the Articles of Association.<\/p>\n

    Those Articles of Association set out who makes decisions, how shares are owned and transferred, how profits are paid out, and what happens when directors or Shareholders disagree. They matter most when something goes wrong, because that is when the small print stops being background and starts deciding outcomes.<\/p>\n

    When a company is formed, its founders must decide which Articles of Association to use. They can adopt the government\u2019s standard Model Articles, or they can adopt an alternative set of Articles. If they use alternative or bespoke Articles, those Articles still have to comply with the relevant requirements set out in the Companies Act 2006. Companies House will generally register whatever Articles are filed with it, so it does not check that an unusual or heavily customised set is legally effective. Smart Formations offers its own standard House Articles as an alternative that is better suited to small, director-owned companies.<\/p>\n

    The Model Articles of Association \u2013 contents<\/h2>\n

    The Model Articles of Association for private companies limited by shares are split into five sections as follows.<\/p>\n

    Part 1: interpretation and limited liability<\/h3>\n

    Articles 1 and 2 lay the groundwork. Article 1 defines the main terms used throughout the document, including \u201carticles\u201d, \u201cdirector\u201d, \u201cshareholder\u201d, \u201cordinary resolution\u201d, and \u201cspecial resolution\u201d. Article 2 sets out the limited liability rule, namely that the liability of members is limited to the amount, if any, unpaid on the shares held by them.<\/p>\n

    Part 2: directors<\/h3>\n

    Part 2 deals with the management of the company. Article 3 gives the directors general authority to manage the company\u2019s business. Article 4 reserves a power for the Shareholders, by special resolution, to direct the directors to take, or refrain from taking, specified action. Articles 5 and 6 cover delegation and committees., or refrain from taking, specified action. Articles 5 and 6 cover delegation and committees.<\/p>\n

    The main board procedure rules are in Articles 7 to 16. Article 7 contains the general rule about director decision-making and the sole-director carve-out. Article 8 deals with unanimous decisions. Articles 9 to 12 deal with calling meetings, participation, quorum, and chairing meetings. Article 13 gives the chair a casting vote where votes are equal, subject to the stated exception. Article 14 deals with conflicts of interest in relation to proposed transactions or arrangements with the company. Article 15 requires records of directors\u2019 decisions to be kept for at least ten years. Article 16 lets the directors make further procedural rules.<\/p>\n

    Articles 17 to 20 deal with the directors themselves. Article 17 covers appointment. Article 18 sets out the circumstances in which a director ceases to hold office. Article 19 deals with directors\u2019 remuneration. Article 20 allows the company to pay reasonable expenses properly incurred by directors in connection with meetings, resolutions, or the exercise of their powers and duties.<\/p>\n

    Part 3: shares and distributions<\/h3>\n

    Part 3 covers share capital and money out. Article 21 deals with shares to be fully paid. Article 22 gives the company power to issue shares with different rights or restrictions and also redeemable shares. Articles 24 to 29 deal with share certificates, transfers, and transmission of shares. Articles 30 to 35 cover dividends and other distributions, and Article 36 deals with capitalisation of profits.<\/p>\n

    Part 4: decision-making by Shareholders<\/h3>\n

    Part 4 deals with general meetings and Shareholder voting. Articles 37 to 41 cover attendance, quorum, chairing meetings, and adjournment. Articles 42 to 46 deal with voting, polls, proxies, and delivery of proxy notices.<\/p>\n

    Part 5: administrative arrangements<\/h3>\n

    The remaining provisions deal with administrative machinery such as communications, company seals, indemnity, and insurance.<\/p>\n

    In practice, many founders forming companies online do not spend much time thinking about the Model Articles. They arrive on a formation agent\u2019s website, provide the information requested, and adopt the standard Articles offered as part of the process. Some companies, for example special purpose vehicles with bespoke investor terms or unusual share structures, use tailored Articles of Association drafted separately. Smart Formations can accept uploaded Articles of Association where clients already have a bespoke constitution, but the vast majority of director-owned companies simply adopt the House Articles provided as part of the formation service.<\/p>\n

    The Model Articles are free, lawful, and workable. For many companies they are perfectly adequate. Even so, many founders choose an alternative set of Articles of Association that better fits the company they are setting up. That is the space in which standard House Articles sit.<\/p>\n

    Where Smart Formations\u2019 House Articles differ<\/h2>\n

    Smart Formations\u2019 House Articles start from the same foundation as the Model Articles and change only the parts that matter in practice. Most of the wording remains very close to the statutory model. The changes fall into two broad groups: changes that reduce practical uncertainty or add a useful statutory option, and changes that reflect a deliberate practical choice that founders should understand.<\/p>\n

    1. Sole director decision-making<\/h3>\n

    Model Articles position.<\/strong> Article 7(1) says that the general rule is that decisions of the directors must be either a majority decision at a meeting or a unanimous decision taken in accordance with Article 8. Article 7(2) then says that, if the company only has one director, and no provision of the Articles requires it to have more than one director, the general rule does not apply and the director may take decisions without regard to any of the provisions of the Articles relating to directors\u2019 decision-making. At the same time, Article 11 says that the quorum for directors\u2019 meetings may be fixed from time to time by a decision of the directors, but it must never be less than two.<\/p>\n

    Smart Formations\u2019 House position.<\/strong> The House Articles add a simple express rule that where there is a single director, one director is enough.<\/p>\n

    Why we chose this approach.<\/strong> The intention is to reduce practical uncertainty for companies operating with a sole director. For the director-owned companies that typically use online formation services, Smart Formations considered it more suitable to state the sole-director position plainly, rather than rely on the interaction of several Model Articles.<\/p>\n

    2. Small purchases by the company of its own shares<\/h3>\n

    Model Articles position.<\/strong> The Model Articles do not contain a dedicated provision dealing with the small-scale own-share purchase route.<\/p>\n

    Statutory background.<\/strong> Section 690 Companies Act 2006 provides that a limited company having a share capital may purchase its own shares, subject to Chapter 4 of Part 18 and to any restriction or prohibition in the company\u2019s Articles. The explanatory notes make clear that section 690 removed the former requirement for prior authorisation in the company\u2019s Articles, while preserving the ability of members to restrict or prohibit purchases through the Articles if they wish.<\/p>\n

    Smart Formations\u2019 House position.<\/strong> The House Articles include a specific provision allowing a small cash buyback up to the lower of \u00a315,000 or 5% of the nominal value of the company\u2019s fully paid share capital in a financial year, always subject to the Companies Act 2006 requirements.<\/p>\n

    Why we chose this approach.<\/strong> The intention is to include an express constitutional route that reflects the statutory framework for own-share purchases. In practice, Smart Formations considered this more suitable for the director-owned companies that use its service, because it gives them a clearer route for small buyouts and tidy-ups without having to revisit their Articles later.<\/p>\n

    3. Conflicts of interest and board paralysis<\/h3>\n

    Model Articles position.<\/strong> Article 14 provides that, if a proposed decision of the directors is concerned with an actual or proposed transaction or arrangement with the company in which a director is interested, that director is not to be counted as participating in the decision-making process for quorum or voting purposes unless one of the stated exceptions applies.<\/p>\n

    Smart Formations\u2019 House position.<\/strong> The House Articles reduce the decision-making group to the unconflicted directors. If every director is conflicted, the matter is referred to the Shareholders.<\/p>\n

    Why we chose this approach.<\/strong> The intention is to reduce the risk of the board becoming unable to act where conflicts affect every director. For director-owned companies, Smart Formations considered it more suitable to prioritise a workable decision-making path, while leaving directors\u2019 statutory duties and conflict-management obligations in place.<\/p>\n

    4. Tied board votes<\/h3>\n

    Model Articles position.<\/strong> Article 13 gives the chair a casting vote if numbers of votes for and against a proposal are equal, unless the chair is not to be counted as participating in the decision for quorum or voting purposes.<\/p>\n

    Smart Formations\u2019 House position.<\/strong> The House Articles remove the casting vote. If the board is tied, the proposal fails.<\/p>\n

    Why we chose this approach.<\/strong> The intention is to avoid one side prevailing solely because its nominee chairs the meeting. In a 50\/50 director-owned company, Smart Formations considered that trade-off more suitable for the kinds of companies using its service, even though it can increase deadlock risk where the board is evenly split.<\/p>\n

    5. Adjourned Shareholder meetings and quorum problems<\/h3>\n

    Model Articles position.<\/strong> Articles 38 and 41 deal with quorum and adjournment. If a quorum is not present, the meeting cannot transact substantive business and must be adjourned.<\/p>\n

    Smart Formations\u2019 House position.<\/strong> The House Articles provide that, at the adjourned meeting, whoever attends forms a valid quorum.<\/p>\n

    Why we chose this approach.<\/strong> The intention is to reduce the risk of company business being blocked by non-attendance. For many director-owned companies using online formation services, Smart Formations considered it more suitable to reduce the risk of one Shareholder obstructing necessary business by staying away.<\/p>\n

    Key differences at a glance<\/h2>\n
    \n\n\n\n\n\n\n\n\n
    Issue<\/th>\nModel Articles<\/th>\nSmart House Articles<\/th>\n<\/tr>\n<\/thead>\n
    Sole director<\/td>\nGeneral rule with sole-director carve-out.<\/td>\nExpress one-director rule.<\/td>\n<\/tr>\n
    Small buy-backs<\/td>\nNo dedicated clause.<\/td>\nExpress constitutional provision, subject to the Companies Act 2006 framework.<\/td>\n<\/tr>\n
    Conflicted board<\/td>\nModel conflict rules in article 14.<\/td>\nShareholder fallback if all directors are conflicted<\/td>\n<\/tr>\n
    Tied votes<\/td>\nNormal quorum and adjournment rules.<\/td>\nThose attending form quorum<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n

    A few smaller drafting changes<\/h2>\n

    Smart Formations\u2019 House Articles also make smaller drafting changes.<\/p>\n

      \n
    • They use \u201cshareholder\u201d rather than \u201cmember\u201d, which many readers find easier to follow.<\/li>\n
    • They add clearer signposting to relevant statutory provisions where helpful.<\/li>\n
    • They include a process for dealing with a director who has been absent or missing for an extended period.<\/li>\n<\/ul>\n

      None of those changes rewrites company law. They are practical drafting improvements designed to make the rulebook easier to read and easier to use.<\/p>\n

      Conclusion<\/h2>\n

      A company\u2019s Articles of Association are easy to ignore until a dispute, a buyback, or a board deadlock brings them into focus. For many incorporations, the real choice is not between the Model Articles and a heavily bespoke constitution drafted from scratch. It is between the government\u2019s default rulebook and an alternative set of Articles that still has to work within the Companies Act 2006. Smart Formations\u2019 House Articles are intended to keep the familiar Model Articles structure while improving a small number of practical points that matter in real director-owned companies.<\/p>\n

      \n

      Frequently Asked Questions<\/h2>\n
      \n
      \n

      Can I replace Model Articles after incorporation?<\/h3>\n

      <\/i><\/span>\n <\/div>\n

      \n

      Yes. A company can replace the Model Articles with a different set of Articles of Association by passing a special resolution and filing the amended Articles at Companies House in accordance with the Companies Act 2006. In practice, that is how companies move from the statutory default to a tailored or alternative constitution.<\/p>\n<\/div>\n<\/div>\n

      \n
      \n

      Do accountants usually amend Articles?<\/h3>\n

      <\/i><\/span>\n <\/div>\n

      \n

      No, not as a routine step. Accountants will often flag that Articles may need changing where there are new share classes, outside investors or tax\u2011driven structures, but the actual drafting and amendment process is normally handled by lawyers or by using a prepared alternative such as a formation agent\u2019s House Articles.<\/p>\n<\/div>\n<\/div>\n

      \n
      \n

      Can Companies House reject Articles?<\/h3>\n

      <\/i><\/span>\n <\/div>\n

      \n

      Companies House checks that Articles have been filed in the correct form, but it does not generally review the detailed drafting for legal effectiveness. If Articles contain something obviously incompatible with the basic requirements of company law or the incorporation form, there can be filing issues, but an unusual or heavily customised set is not tested by Companies House in the same way a court would test it in a dispute.<\/p>\n<\/div>\n<\/div>\n

      \n
      \n

      Can shareholders ignore Articles?<\/h3>\n

      <\/i><\/span>\n <\/div>\n

      \n

      No. The Articles of Association bind the company and its members in the same way as a contract, so Shareholders cannot simply ignore them when it is inconvenient. They can change the Articles by following the Companies Act procedure, but unless and until they do, the Articles govern how decisions are taken, how rights are exercised, and how disputes are handled.<\/p>\n<\/div>\n<\/div>\n

      \n
      \n

      Do Articles override a shareholders\u2019 agreement?<\/h3>\n

      <\/i><\/span>\n <\/div>\n

      \n

      Neither document fully \u201coverrides\u201d the other, but the Articles are part of the company\u2019s constitution and apply to everyone, while a shareholders\u2019 agreement is a contract between particular parties. If there is a conflict, the Articles will usually govern how the company can act, while the shareholders\u2019 agreement may give those parties additional contractual rights or remedies. A well\u2011designed structure keeps both documents aligned with each other and with the Companies Act 2006.<\/p>\n<\/div>\n<\/div>\n

      \n
      \n

      Can different shareholders have different rights?<\/h3>\n

      <\/i><\/span>\n <\/div>\n

      \n

      Yes. The Companies Act allows companies to issue shares with different rights and restrictions, and the Articles of Association can set out those differences in detail. That is how companies create preference shares, non\u2011voting shares, or classes with different dividend or veto rights. The key is that the Articles must describe the rights clearly, and every shareholder holding a particular class is bound by those rules.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

      \n

      References<\/h2>\n
        \n
      • GOV.UK \u2013 Model articles of association for limited companies.<\/li>\n
      • GOV.UK \u2013 Model articles for private companies limited by shares.<\/li>\n
      • GOV.UK PDF \u2013 Articles of association standard form.<\/li>\n
      • Legislation.gov.uk \u2013 Companies Act 2006, section 33.<\/li>\n
      • Legislation.gov.uk \u2013 Explanatory Notes to section 33.<\/li>\n
      • Legislation.gov.uk \u2013 Companies Act 2006 (general framework).<\/li>\n
      • Legislation.gov.uk \u2013 Companies Act 2006, section 690.<\/li>\n
      • Legislation.gov.uk \u2013 Explanatory Notes to Part 18 purchase of own shares.<\/li>\n<\/ul><\/div>\n<\/article>\n","protected":false},"excerpt":{"rendered":"

        Important disclaimer This article is general information about UK company law and company formation practice. It is not legal, tax […]<\/p>\n","protected":false},"author":2,"featured_media":183,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[5,11],"tags":[],"class_list":["post-182","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-informations","category-company-legal-information"],"_links":{"self":[{"href":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/wp-json\/wp\/v2\/posts\/182","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/wp-json\/wp\/v2\/comments?post=182"}],"version-history":[{"count":1,"href":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/wp-json\/wp\/v2\/posts\/182\/revisions"}],"predecessor-version":[{"id":184,"href":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/wp-json\/wp\/v2\/posts\/182\/revisions\/184"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/wp-json\/wp\/v2\/media\/183"}],"wp:attachment":[{"href":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/wp-json\/wp\/v2\/media?parent=182"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/wp-json\/wp\/v2\/categories?post=182"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.smartformationsblog.co.uk\/smart-blog\/wp-json\/wp\/v2\/tags?post=182"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}