Change of Company Constitution UK: Rules & Steps

Overview

For companies formed under the Companies Act 2006, the constitution is made up primarily of the Articles of Association, along with any resolutions and agreements that affect the constitution (covered by section 29 of the Act). The Articles are the internal rulebook: they cover things like how directors are appointed and removed, how board and shareholder meetings run, voting rights attached to shares, dividend procedures, and how shares can be transferred or issued.

For companies formed before October 2009, the old-style Memorandum of Association is treated as part of the Articles for anything it contained beyond the basic formation details. Newer companies have a much shorter Memorandum that simply records the initial subscribers' intention to form the company.

When people talk about 'changing the constitution', they usually mean amending the Articles, adopting a brand new set of Articles, or passing resolutions that override or modify what the current Articles say. Any of these changes has legal effect on the company, its directors, and its shareholders, so the process must be followed properly.

Key steps

1. Work out exactly what needs to change. Read through your current Articles carefully and identify the specific clauses you want to amend, remove, or add. Think about whether you need targeted amendments or a full replacement set of Articles. Common triggers include bringing in investors, introducing new share classes, or moving away from default model articles.
2. Draft the amended Articles or the amending resolution. The wording needs to be precise. Vague or contradictory clauses cause problems later, especially if there is ever a shareholder dispute. If you are replacing the Articles in full, make sure transitional provisions and any entrenched clauses are handled correctly, as entrenched provisions have extra procedural hurdles.
3. Convene a general meeting or arrange a written resolution. Changes to the Articles require a special resolution, which means at least 75% of the votes cast must be in favour. Private companies can use a written resolution circulated to all eligible members; public companies must hold an actual meeting. Give the correct notice period and follow any quorum rules in your existing Articles.
4. Pass the special resolution. Record the vote carefully. If you are using a written resolution, you need signatures or agreement from holders of at least 75% of the total voting rights, not just 75% of those who respond. Keep the signed resolution or meeting minutes on file as part of the company's statutory records.
5. File everything with Companies House within 15 days. You must submit a copy of the special resolution and a copy of the amended Articles (or the new Articles in full) within 15 days of the resolution being passed. Filing late is an offence. Once filed, the changes take effect and the public record is updated.

Common questions