Memorandum and Articles of Association: Why They Matter

The moment you dive into the incorporation process, you’re hit with various documents, regulations, and clauses.

The problem is that most business owners either unintentionally skip over these documents or don’t fully understand what they’re signing.

That might not feel like a big deal on day one. Still, fast forward to raising investment, bringing in co-founders, or handling shareholder disagreements, and suddenly, those overlooked documents can become a major headache.

Read on to learn more about the Memorandum and Articles of Association to see how they can protect your business and attract investors.

1. Memorandum of Association: Your first step in company formation

The Memorandum of Association (MoA) by Companies House is a single-page formal document that records the original subscribers (the first shareholders or guarantors) who agree to form the company.

You can think of it as a birth certificate of your company.

By signing the MoA, each subscriber confirms they want to create the company and, if it’s a company limited by shares, take at least one share.

So, the form differs slightly depending on whether your company has share capital or not.

Since the Companies Act 2006, the MoA no longer contains clauses about the company’s objects, share capital, or registered office.

You’ll find that info in the Articles of Association instead (we’ll tackle that soon).

MoA lists the individuals who agreed to form a company and join it as its first members. Also, each subscriber confirms they want to create the company and, if limited by shares, take at least one share.

Another important thing is that once you file the MoA, it stays part of the public record at Companies House forever.

Regarding the price, you don’t buy the MoA separately.

It’s included in the Companies House incorporation fee, which ranges between £50 and £71 depending on whether you register online or by post.

Quick tip: Avoid a common MoA mistake

Double-check who’s signing. Since you can’t edit your MoA, make sure the subscriber names and details are accurate.

Why is the Memorandum of Association important for your business?

Although the MoA might feel like a tick-box formality, it is an important document that confirms who created the business, makes that information permanently public, and underpins your company’s legal identity.

The following aspects underline just how important the Moa is:

• Legal requirement: You can’t form a limited company without it. Companies House generates a compliant MoA automatically when you register online.
• Permanent record of founders: It’s the official, unchangeable list of your company’s first members. Even if those people later leave or sell their shares, their names remain recorded in the company’s history.
• Transparency & investor confidence: Investors, partners, or lenders often check company filings. A clean, accurate MoA builds credibility by showing exactly who founded the company.
• Evidence in disputes: If there’s ever a legal disagreement about the company’s origins or initial shareholding, the MoA serves as irrefutable proof.
• Public access: Because it’s filed at Companies House, anyone can view your company’s MoA online. This transparency is part of why the UK is considered one of the easiest places in the world to set up a business.

Overall, the Memorandum of Association is a trusted public record that supports the company’s establishment and long-term governance under UK law.

Sorting out these details early saves you headaches later.

With ANNA, your Memorandum is filed automatically when you register your company, no forms, no stress.

2. Articles of Association: Your company’s rulebook explained

The articles are a multi-page document outlining the company’s governance rules, operational procedures, ownership rights, and decision-making processes.

If the MoA is your company’s birth certificate, then the Articles of Association (AoA) are its rulebook. While the MoA says ‘who’ created the company, the AoA says ‘how’ it runs.

Your AoA is where you lay down the internal rules for your company.

What goes inside the Articles of Association

In a nutshell, the AoA is your operating manual, telling everyone in the company what’s allowed, how to make decisions, and how to settle disputes internally. It includes:

• Director’s powers and responsibilities: Who can make decisions, how, and under what circumstances.
• Shareholder rights: How votes are cast, how dividends are paid, and how shares can be transferred.
• Decision-making processes: Rules for general meetings, passing resolutions, and other key company decisions.
• Special clauses: Optional rules you can add for things like pre-emption rights or shareholder protections.

Articles of Association format: model vs. custom

Unlike the Memorandum, the Articles don’t have a fixed format. Companies may:

• Use the Model Articles provided by Companies House as a default template, tailored to the specific company type (private companies limited by shares, limited by guarantee, or public companies).
• Modify the Model Articles to add, remove, or amend specific provisions.
• Draft custom articles to suit specific needs, such as restrictions on directors' powers or special share classes.

Changing the articles requires a special resolution by members and submission of the changes to Companies House within 15 days.

Additionally, changes to the company's objects (what the company does) require a special resolution and the filing of Form CC04 with Companies House.

Another difference between the custom and model AoA is in price.

If you opt for Companies House models, they are free of charge since they are part of the incorporation fee.

However, if you require specific clauses or provisions, then the price range can reach £200.

AoA are valid for as long as your company exists.

Why do Articles of Association matter for your UK company?

The AoA shapes how your business makes decisions, handles shareholders, and navigates growth.

Here are the key reasons why the AoA matters:

• Keeps your company running smoothly: Without clear rules, disagreements between directors or shareholders can spiral into costly legal battles. The AoA prevents chaos by setting clear expectations from the start.
• Protects founders and shareholders: You can include special clauses that protect your founding team or investors, such as ‘first refusal’ rights on share transfers or special voting powers.
• Customisable vs. model AoA: Companies House provides a “model” AoA that works for most private companies. But if you have unique arrangements, customising your AoA ensures your company runs exactly the way you intend.
• Legal backbone for operations: Courts will look at your AoA if disputes arise. Unlike informal agreements, these rules are legally binding, making them crucial for protecting your company and its shareholders.

3. What is a Non-public Shareholder’s Agreement?

While the articles regulate internal company management, many companies also adopt a separate, non-public Shareholders’ Agreement (SHA).

It supplements the articles with additional arrangements about the company’s administration and shareholder powers.

The SHA also fills in the gaps the Articles leave, giving shareholders a flexible, private plan that works for their unique business needs.

How Shareholders’ Agreements interface with Articles of Association

While the Articles of Association are public and anyone can see them at Companies House, a Shareholders’ Agreement stays private between the shareholders.

The AoA provides standard provisions on company governance, but often misses key provisions on shareholder relationships, decision-making thresholds, and exit mechanisms. The SHA fills these gaps, covering detailed matters such as:

• Share transfer restrictions and valuation mechanisms
• Tag-along and drag-along rights protecting minority and majority shareholders in sales
• Dividend policies and dispute resolution procedures
• Deadlock resolutions and specific shareholder obligations.

The SHA doesn’t replace the AoA. Both documents work side by side instead.

The Articles of Association handle the legal rules needed to set up the company and keep on record, while the Shareholders’ Agreement deals with private business arrangements between the shareholders.

Memorandum and Articles of Association: How do they work together?

Memorandum and Articles of Association are two very different documents, but they complement each other and are inseparable for a legally compliant UK company.

Without the MoA, your company doesn’t exist. Without the AoA, it might exist, but chaos could reign inside.

In other words, one proves your company exists, the other ensures it functions properly.

Together, they provide:

• Legal compliance: You can’t register a UK company without the MoA, and having the AoA in place ensures your company complies with the Companies Act 2006. This combination makes your business legally recognised and fully operational from day one.
• Clarity for shareholders and directors: The MoA shows who founded the company. At the same time, the AoA sets out who can do what and how, preventing misunderstandings or disputes among shareholders and directors.
• Investor confidence: Investors and banks in the UK often check your filings on Companies House. A properly completed MoA and well-drafted AoA show that your company is transparent, structured, and trustworthy.
• Long-term governance: The MoA and AoA form your company’s legal DNA. For founders, directors, and shareholders, they provide stability and predictability, which is especially important in the business environment.

Having your MoA and AoA in place, and backed by SHA, makes your company not just a legal entity, but a well-organised, investor-ready business.
With ANNA, all the filings are handled for you, no missed details, no stress.

How to get your UK company running smoothly with ANNA Money?

ANNA Money is an all-in-one company formation, business banking, and comprehensive tax and accounting solution.

Our tools simplify the process of company formation and ongoing financial management for UK businesses.

Here’s how we can help:

✅Company formation made easy: Choose your company name, provide the necessary details, and receive your company registration and business account quickly, with the Companies House fee on us.

✅ Shareholder management: We manage the issue and transfer of shares, update Companies House records, and keep your shareholding structure up-to-date to ensure compliance with legal requirements.

✅ All-in-one accounting software that does:

• A Confirmation statement filing, which is a legal requirement once a year, to confirm the details of the company owners. If missed, the directors can get a fine of up to £5000, and the company will be struck off the Companies House.
• Automated Tax Calculations: Automatically calculate and file VAT, Corporation Tax, and PAYE with ease.
• Expense Management: Claim more expenses and lower your tax bills with automatic expense sorting.
• Personalised tax calendar: Receive reminders to ensure you never miss a tax deadline.
• Smart receipt scanner: Just snap a photo of your receipt, and we automatically match it to the right transaction, sort it, and help work out your taxes.
• Tax estimations: In-app calculators estimate your income tax as you earn, helping you avoid unexpectedly high tax bills.

✅ Business banking and financial management: Create and send professional invoices, and get paid instantly with your unique payment link, connect your bank accounts to see your finances in one place, and track your expenses.

Want to see ANNA in action?

Create an ANNA account today and start your UK company the right way.