Vestd Articles of Association: Built for fundraising startups

Every UK company needs Articles of Association (AoA)—the legal rules outlining the governance of your company. These Articles play a crucial role in shaping your company's growth, so it's essential to choose the right ones from the start.

Many use the default Model Articles from Companies House, which are fine for basic use, but limited for investment-ready startups.

Vestd’s Articles are based on the British Private Equity & Venture Capital Association (BVCA) investor standard, with added clauses for hassle-free fundraising, and investor flexibility.

Key features of Vestd Articles

Vestd’s AoA are purpose-built to support fast-moving startups, giving you greater flexibility and choice over how you grow. By keeping your options open from day one, you can choose the path that best suits your business, without needing to rework key documents later.

Let's dive into the key features:

S/EIS protections

HMRC compliant clauses for the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) built-in to ensure investors keep tax benefits. We also include dividend restrictions on S/EIS share classes to prevent disqualifying events. These inclusions remove the legal burden on S/EIS shares, and provides security for the projected tax benefits.

For founders raising early-stage capital, these protections can make or break investor interest. With automatic safeguards in place, your investors can rest assured that their tax relief won't be jeopardised through incompatible articles.

Customisable share structure

Vestd Articles allow for various share classes, including ordinary, growth, and non-voting. Model Articles take a more one-size-fits-all approach with ordinary shares only. This gives founders the power to structure investor control, employee incentives, and ownership how they see fit.

This flexibility can be vital when balancing short-term funding goals with long-term retention and success. From you're issuing non-voting shares to maintain control, to growth shares to reward key hires without immediate dilution, custom structures unlock strategic advantages.

Conditional shares

Vestd Articles enable conditional shares and the application of vesting schedules for founders, teams, and advisors which boosts alignment, performance and loyalty. Model articles have no provisions for vesting schedules and conditional shares. 

These provisions ensure that employees and stakeholders earn their equity over time, rather than walking away with a significant stake unearned.

This not only helps build a sustainable foundation for your business but also reassures investors that your equity strategy is considered, and designed for long-term growth.

Drag-along and tag-along rights

Drag-along rights prevent minoristy shareholders from blocking a sale, whereas tag-along rights prevent them getting left behind. Having both in place aligns founder and investor missions, and makes your company more attractive to investors who look into your exit strategy.

Clear outlines of drag-along and tag-along rights for shareholders ensure smooth changes to shareholdings and exits down the line. This enables a more seamless exit strategy for investors.

Share buybacks

Vestd Articles include built-in share buyback provisions, subject to approval and company policy. This is especially useful when managing equity returns from leavers, allowing you to reclaim shares without excessive pushback, avoiding legal battles.

Pre-emption rights

We include robust pre-emption rights for new shares issued and share transfers, giving existing shareholders priority to buy.

This can protect shareholders from unexpected dilution, and is especially useful in boosting early investor confidence, where existing shareholders might want to protect their stake.

Good or bad leaver clauses

We include good/bad leaver clauses that provide structured framework for buying back shares based on their leaver status. Without clear definitions of what happens when a founder or team member leaves, equity disputes can get messy and expensive.

These help to set expectations early-on, making exits smoother, and protecting the company. 

Decision-making made clearer

Vestd Articles align with Model Articles but explicitly include electronic acceptance. This minimises ambiguity, and reduces lengthy disputes, making remote approvals faster and more transparent. Faster decisions mean better responsiveness, especially in competitive markets!

Vestd vs Model AoA

Vestd AoA: Built to attract and retain investment

Vestd’s Articles are built for fast, flexible fundraising, and sustainable startup growth. They offer greater nuance in equity structuring, so you can scale without needing complex legal changes to model articles—plus, they can be simply adopted through your Vestd account!

They're not just legally sound, they're founder-friendly too. With the same protections top investors expect, and the flexibility founders need, Vestd AoA are the smarter starting point for startups looking to grow, raise, and exit on their own terms.

With built-in stakeholder protections, clear governance rules, and adaptable decision-making, they’re designed to be investment-friendly and evolve with your business—without the admin headaches.

Book a call today to discuss incorporating with Vestd and adopting our Articles.