Articles of Association (UK)

TL;DR

UK company's constitutional document at Companies House setting share rights, transfer restrictions, board powers, drag/tag and decision thresholds.

In the UK, the Articles of Association are the binding constitutional document for the company — equivalent to a US Certificate of Incorporation plus stockholders' agreement combined. They set out the share classes and rights (preference, ordinary, growth shares), pre-emption rules on new issues and transfers, drag-along and tag-along rights, board composition, and decision-making thresholds requiring investor consent.

At every priced round, the Articles are amended and a new version is filed at Companies House. Investors negotiate hard on which 'reserved matters' require their consent, the size and weighting of any anti-dilution protection, and the exact mechanics of drag-along (typically 50%+ of preference holders consenting). Because the Articles are public, sensitive economic terms (like the size of a liquidation preference multiple) sit there for any future investor or competitor to read.

Worked example

A UK Series A's Articles are restated to introduce a single class of Series A preference shares with a 1× non-participating liquidation preference, weighted-average anti-dilution, drag-along triggered at 50% of preference plus 50% of ordinary, and 14 reserved matters requiring Series A consent — filed at Companies House on closing.

Common pitfalls

• Adopting the unmodified UK 'model articles' for a venture round — they lack drag, tag, anti-dilution, and reserved matters and will be replaced anyway at the term sheet stage.
• Letting the Articles diverge from the shareholders' agreement so that the two contradict each other on key questions.
• Filing materially negotiated terms (large liquidation preferences) in the public Articles that you'd rather have kept private.

When this shows up in a pitch deck

Not in the deck, but referenced in the term sheet's 'definitive documents' section and surfaced in due diligence.

Related terms

• Term Sheet — A non-binding document outlining the principal terms of a proposed financing, used to align investor and founder before legal documents are drafted.
• Drag-Along Rights — A provision allowing majority shareholders to force minority shareholders to participate in an approved sale of the company on the same terms.
• Tag-Along Rights — The right of minority shareholders to join a sale by majority shareholders on the same terms, preventing 'cherry-picking' liquidity.
• Anti-Dilution (Weighted Average) — A standard anti-dilution provision that adjusts a prior preferred holder's conversion price using a formula weighted by the size of the down round.
• Liquidation Preference — The right of preferred shareholders to be paid a defined amount before common shareholders receive any proceeds in a liquidation event.

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