The ADGM model Articles of Association (Articles) should be amended to bring in additional agreed terms between shareholders (such as those in a Shareholders' Agreement) or to reference the rights of additional share classes. Amending Articles is a shareholder matter and requires, at a minimum, the approval of shareholders holding 75% or more of the voting shares in the company. This approval can be by written resolution or at a shareholder meeting.
The ADGM model Articles of Association are a good starting point for all ADGM companies and contain key rules around running and governing the company. They outline the relationship between the company's shareholders and directors, including powers, rights and obligations and they sit side-by-side with the ADGM Company Regulations.
There are a number of reasons why a company may want or need to change their Articles:
it might want to issue a new class of shares so the rights attaching to those shares need to be set out in the articles (for example, voting versus non-voting shares);
it may have entered or plan to enter into a shareholders' agreement (SHA) which contains detailed information around the governance of the company. The key provisions of the SHA should be brought into the Articles so the two documents are aligned and avoid conflicts between the Articles and SHA;
a new investor may have a right to appoint a director and this should be reflected in the Articles;
the company may plan to create a share incentive plan and want to include some key provisions in the Articles around these shares and the plan.
Amending your articles requires engaging a law firm who is familiar with ADGM Company Regulations. If you would like us to make an introduction to one of our Clara Partners, please let us know.