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Articles of Association

Succession planning is a critical process for any business, particularly for those with multiple shareholders or family-owned companies where the continuity of the business is of utmost importance. One of the key legal instruments that can be amended to reflect and support a succession plan is the company’s Articles of Association. At Blackstone Solicitors, we understand the importance of ensuring that these foundational documents align with your long-term business objectives

Contact us today and we can talk you through our services and how we can help you and your family. Simply call us on 0345 901 0445 or complete our online enquiry form and a member of the team will give you a call back as soon as possible.

At Blackstone, we always aim to provide the best service possible. Meticulous in our approach, we will make sure everything is dealt with as you wish and will keep you updated throughout the legal process, ensuring that you always know of any developments.

Our Services

We can provide help with a wide range of matters relating to Succession Planning, including:

• Director Lasting Power Of Attorney
• Partnership agreements
• Shareholder Agreements
• Amends To Articles Of Association
• Making a Will
• Setting up Trusts
• Lifetime Giving
• Charitable gifts and trusts
• Protection from care home fees
• Setting up a Lasting Power of Attorney
• Setting up a Health and Welfare Lasting Power of Attorney
• Setting up a Property and Financial Lasting Power of Attorney

We have partners we work closely with that can advise upon:

• Tax Planning including advising on capital gains tax and income tax for individuals, businesses, landed estates, professionals, entrepreneurs and advice on matters including business relief, exemptions and retirement planning.

What Are Articles of Association?

The Articles of Association are a company’s internal rulebook, setting out the regulations for running the company, the responsibilities of its directors, and the rights of its shareholders. These documents are legally binding and play a crucial role in the governance of the company. The Articles of Association cover a wide range of matters, including how decisions are made, how shares are issued and transferred, and the procedures for appointing and removing directors.

In the context of succession planning, the Articles of Association can be amended to include provisions that facilitate a smooth transition of ownership and control, thereby ensuring the continuity of the business.

Why Amend the Articles of Association for Succession Planning?

Amending the Articles of Association to reflect succession planning objectives is important for several reasons:

1. Share Transfer Provisions

One of the most important aspects of succession planning is controlling the transfer of shares. Amendments to the Articles of Association can include pre-emption rights, which give existing shareholders the right to purchase shares before they are offered to external parties. You can also include provisions that require shares to be sold back to the company or to remaining shareholders in the event of a shareholder’s death or departure.

2. Director Appointment and Removal

The Articles of Association can be amended to include specific provisions regarding the appointment and removal of directors. This is particularly important in family-owned businesses, where it may be desirable to ensure that certain family members are guaranteed positions on the board, or where succession planning involves the grooming of a future leader from within the family.

3. Decision-Making Processes

The decision-making processes set out in the Articles of Association should be reviewed and, if necessary, amended to reflect the realities of the business as it moves through a succession. This might include changes to the quorum for board meetings, voting rights, or the requirement for unanimous decisions on certain key issues. Ensuring that the decision-making processes are aligned with the succession plan can prevent gridlock and ensure the smooth running of the company.

4. Buy-Sell Agreements

Buy-sell agreements are a common feature in succession planning, providing a mechanism for the purchase and sale of shares under specified conditions. These agreements can be incorporated into the Articles of Association, ensuring that they are legally enforceable and that all shareholders are aware of the terms. This can provide certainty and clarity in the event that a shareholder wishes to exit the business or passes away.

5. Dispute Resolution Mechanisms

Including dispute resolution mechanisms in the Articles of Association can be invaluable, particularly during periods of transition. Provisions for mediation or arbitration can help to resolve conflicts quickly and efficiently, without resorting to costly and time-consuming litigation. This is particularly important in succession planning, where emotions can run high, and disputes can quickly escalate.

The Process of Amending the Articles of Association

Amending the Articles of Association is a formal process that requires the approval of the shareholders. Typically, a special resolution is required, which means that at least 75% of the shareholders must agree to the proposed amendments. Once the amendments are approved, they must be filed with Companies House to be legally effective.

Given the importance of the Articles of Association and the complexity of succession planning, it is highly advisable to seek professional legal advice when considering amendments. At Blackstone Solicitors, we have extensive experience in helping businesses navigate the succession planning process, including drafting and amending Articles of Association to reflect the specific needs and goals of our clients.

Our Approach

We are 100% committed to ensuring each and every one of our clients receives the highest quality service and we will go the extra mile to ensure that you are happy with the results gained. We understand it can be particularly difficult to deal with matters relating to death and inheritance and this is why our friendly and approachable team always take a sympathetic and understanding approach, ensuring that you receive the support you need.

We believe communication is of the utmost importance. We will therefore keep you updated as things develop, and our solicitors will provide practical, straightforward legal advice so that you can be confident everything is progressing as you would like.

Get in Touch

Contact us today to discuss any matter relating to Succession Planning. We can talk about your situation in depth and get to the bottom of what you need and how we can help. We are here to answer any questions which you have, and we aim to make everything as simple for you as possible.

Our team is approachable, professional and vastly experienced. We will do everything in our power to help you get the outcome you need. Call us on 0345 901 0445 or, if you would prefer us to contact you, leave your details via our online enquiry form.

We offer our services to clients in Manchester, Chester, Cheshire and throughout the rest of the UK. We also have an office in London.