By 10 September 2022, Oxford United FC and all other English Football League clubs will need to adhere to the newly agreed integration of mandatory provisions into each company’s Articles of Association.
Naturally, for most fans, it’s this kind of news that’s background information – what really matters takes place on the pitch. However, behind the scenes, these additional mandatory provisions are important, which is why the EFL’s 10 June 2022 annual general meeting approved the move. These Articles of Association integrations concern the registration of share transfers and the way in which interests in shares are recognised.
What are Articles of Association?
Articles of Association are rules established and written by the company to dictate how the company is run. These rules need to be agreed upon by the company secretary, directors, shareholders and guarantors to come into force.
Some companies will use model articles as the core of their Articles of Association, but this isn’t necessary. Any company can write and publish its own Articles of Association upon registration.
The Articles of Association clearly lay out how a company is run. They can include everything from when board and shareholder meetings need to take place to the roles of responsibilities of people in leadership positions. They also outline how company shares will be allocated and transferred.
What the EFL has done with its new mandatory ruling is allow clubs to refuse to register the transfer of any share unless the the EFL has:
- confirmed consent
- confirmed that the recipient isn’t liable to be disqualified, and if doing so would breach the rules of the Football Association or Premier League.
Oxford United Football Club Limited is required to file company documentation, including accounts and statements concerning capital and shares with Companies House, because they are a corporation. Therefore, any fan can have a look at the public documents on Companies House.
Why are Articles of Association important for all companies?
Regardless of company size or stage, Articles of Association aren’t just procedural paperwork for a new or existing company. They’re essential to define how a company operates. Everything is much clearer and easier with well-thought-out Articles of Association as they clearly state who owns what each arty is responsible for. This way everybody knows what they need to do and room for dispute is reduced.
Still, this doesn’t always make it easy for new companies to establish these key rules. This is where services like SeedLegals can be very helpful. Their packages designed to streamline the investor funding round include the creation of Articles of Association and unlimited help from experts when creating your documents. Having well-designed legal documents, especially articles of association, helps startups become more attractive to investors and therefore raise funding faster.
The new mandatory ruling from the EFL should give more quality control to the governing bodies of football. As Articles of Association help companies run smoother, it makes sense to have them integrated into the EFL’s governing companies.