Entrepreneurs, you've established your strategy, everything is clear to you! Now you're ready to put your idea into practice, but before you can actually set up your business, you need to draw up your company's articles of association! If you're unfamiliar with this exercise, here are a few points to help you get a clearer picture.
A few tips for drafting your articles of association
A company's Articles of Association inform third parties of the rules governing relations between partners. Their purpose is to set down in writing the company's operating and management procedures.
This document has several functions. For the company's partners, it is first and foremost a contract that specifies the weight of each partner in the company's decisions. It sets out the function and role of each partner, as well as the appointment of the Chairman, depending on the status chosen.
Information for third parties
As far as third parties are concerned, the articles of association provide information on the company's capital and legal status. The bylaws also contain information on the company's name, registered office, capital amount and corporate purpose.
As an official document setting out the specifics of the company and its associates, the Articles of Association must comply with certain rules. In fact, when drafting the articles of association, you must take care to include mandatory information that differs according to the legal form chosen. It is important to note that articles of association must be drawn up in writing, either as a private document or as a notarized deed.
Mandatory information
Although the compulsory information may differ depending on the legal form chosen, the following must be included:
- the shape
- duration
- company name
- the head office
- corporate purpose
- partners' contributions
- operating mode
- the amount of share capital
So it's easy to understand that, depending on the legal form chosen, there are certain rules to follow when drafting the articles of association, and that you need to pay close attention to certain elements to avoid unpleasant surprises.
When drafting your articles of association, you have two options. You can have your articles of association drawn up by a professional, or you can draft them yourself.
An inexpensive option
If you choose the second option, it won't cost you anything, but you inevitably increase the risk of errors and inconsistencies in your document. Indeed, if you are not sufficiently informed, you may forget certain points or fail to appreciate the scope of each clause drafted.
The trap the founder(s) will often fall into is to take a model from the Internet and draw inspiration from it. This is not without risk! So be sure to use a template from a recognized site, or one drawn up by a professional.
To limit the risks, consider asking a professional to advise you or simply to proofread your document.
Choosing a professional to draw up your articles of association will give you the security you need and the support and advice you need.
However, you should be aware that hiring a professional can cost from a few hundred to several thousand euros, depending on the difficulty of the project and the legal experts involved.
Lawyer, Notary or Chartered Accountant
When it comes to choosing the right professional to draw up your articles of association, a lawyer or notary is the best person for the job. You can also call on the services of a chartered accountant if this is a mission ancillary to an accounting mission.
As you can see, drafting your articles of association is a compulsory stage in the creation of your company. The purpose of this document is to specify the company's management rules, as well as the role and relationship between the partners and the company.
A step not to be neglected, the drafting of your company's articles of association informs third parties of the specifics of your business. It must include mandatory information, which will vary depending on the legal form.
You can choose to draw up your own articles of association, or have them drawn up by a professional. In both cases, there are advantages and disadvantages, but above all it's up to you to make the choice that best suits your needs.
Strategic choices
Finally, even if your articles of association are not set in stone and can be modified, make sure you choose the name of your company and the address of your registered office carefully. These are two important criteria for your reputation and visibility. When it comes to your registered address, consider specialized companies that can guarantee you a prestigious and strategic address.
Written by our expert Antoine Dubois
August 29, 2017
