If you have a limited company, your company will have two documents, the Memorandum of Association and Articles of Association. The articles set out how the company is to be run, such as rules governing the appointment and removal of directors and the issuing of shares. They will also govern what happens if the company is wound up.
Most companies are formed by solicitors using standard templates. However, these may no longer be appropriate for the company due to changes in direction and personnel over time.
Companies may also have a Shareholders’ Agreement in place, although this is not mandatory. A Shareholders’ Agreement goes further than the Memorandum and Articles of Association, detailing, for example, what happens if a shareholder dies, or if there is a dispute between shareholders.
We recommend that company owners review their Memorandum and Articles of Association regularly and also consider a Shareholders Agreement.