What Is A Company Constitution? Do I Need One? (2025 Updated)

Contents

Everyone needs to play by the rules, including companies. But how do companies manage the nature of their business, the rights and duties of members and directors, and the way they interact with each other?

This is where a Company Constitution becomes invaluable.

A company constitution is a legal document that sets out how a company operates. It establishes the rights and duties of those at the heart of the company – members, directors and the company secretary. With the evolving corporate landscape in 2025, having a robust constitution can not only streamline decision-making but also provide enhanced protection tailored to contemporary business practices.

A constitution can be adopted at the time you register your company, after registration, or you may choose not to adopt one. However, as our updated guides suggest – such as our Business Set-Up guides – a well-drafted constitution can help to avoid disputes that may arise from the replaceable rules in the Companies Act 1993.

For constitutions adopted when setting up a new company, every member must agree in writing to the constitution’s terms, ensuring that all parties are aligned with the company’s operational framework from the outset.

If you choose not to adopt a company constitution, your company will be governed by the general replacement rules found in the Companies Act 1993. These rules provide a basic framework; however, they are often too broad for the intricacies of modern business. For further insight into how legislation and replaceable rules interact, you might find our article on Legal Due Diligence of interest.

Should you decide to adopt a constitution after your company is already registered, this must be done via a process known as a special resolution. This formal process requires that at least 75% of the members (or their proxies) vote in favour of taking on a new constitution. Updated regulations in 2025 now encourage companies to modernise their governing documents to reflect changes in the business environment, including digital operations and remote working practices.

Where Did Company Constitutions Come From?

Historically, two main legal documents fulfilled the role of a modern company constitution. The Memorandum of Association delineated the rules governing a company’s external dealings, while the Articles of Association addressed its internal operations and relationships among members. These terms have since been superseded by the all-encompassing modern constitution, which offers greater flexibility and clarity.

Do I Need A Company Constitution?

Although having a company constitution is not a compulsory legal requirement, it is highly advisable. When registering a company with the Companies Office, you are required to choose between adopting your own constitution, relying solely on the default rules provided by the Companies Act, or using a mix of both.

Whereas the default legislative rules are available free of charge, many companies choose to invest in a well-developed constitution to secure additional legal and operational protections. Disputes can still arise over matters such as the issuance of new shares, major company decisions or challenges regarding decision-making authority. A customised constitution – drafted with professional advice, such as from our legal experts – can help to address and resolve these issues effectively.

In today’s dynamic business environment of 2025, revisiting and updating your company constitution is particularly prudent given the increase in remote working arrangements, digital transactions and evolving regulatory requirements. Our recent analysis on industry regulations highlights that companies with modern constitutions are better equipped to manage both internal and external challenges.

How Do I Get A Constitution?

You can engage a lawyer to help you draft a constitution for your company – this ensures that the document reflects your business’s unique needs and current legal requirements. Alternatively, while it is possible to draft one yourself, having a professionally drafted document maximises its enforceability and alignment with your company’s best interests. For further guidance, check out our Getting Started with Your Legals guide.

Can I Change A Company Constitution?

Yes, you can amend your company’s constitution – or even dispense with it entirely – by passing a special resolution. Special resolutions must be conducted in accordance with the procedures detailed in your current constitution or, if you do not have one, the rules specified in the Companies Act. At least 75% of the votes cast must be in favour of the change.

When planning to pass a special resolution, ensure you adhere to any notice requirements outlined in your constitution or legislation, so that the resolution is valid. Additionally, you will be required to notify the Companies Office of any changes within 10 days of the resolution being passed. For a more detailed explanation on this process, refer to our Contract Review resources.

Conclusion

If you are operating a company in 2025, it is essential to have the right rules in place to facilitate clear and efficient decision-making. A tailored company constitution not only clarifies the rights and duties of all parties involved but also helps to mitigate potential disputes, ensuring your business can adapt to today’s fast-changing commercial environment.

Should you require assistance in drafting or updating your company constitution, our expert team is here to help. Feel free to explore our comprehensive guides on company set-up and legal tips to learn more about safeguarding your business interests. For a free, no-obligations consultation, please contact us at 0800 002 184 or email [email protected].

Ben Boman

Ben is a law graduate and admitted lawyer in Queensland. Ben has worked in legal, marketing and tech in London, Shanghai and Brisbane and now writes about business topics for Sprintlaw.

Tomoyuki Hachigo

Tomo is the co-founder of Sprintlaw and a commercial lawyer with a broad range of legal experience. Before starting Sprintlaw, he was an M&A lawyer at a top-tier law firm advising businesses of all sizes from large corporates to startups.