Company bylaws in Andorra: mandatory content and best practices

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🧭 The real role of the articles of association within an Andorran company

The articles of association are the document that defines how an Andorran company is organised and operated. They are an essential part of the incorporation deed.

If you wish to review the full incorporation procedure, you can do so in the article Incorporating a company in Andorra: steps, requirements and advantages.

They determine how the company is structured, who makes decisions, how rights and obligations are allocated, how shares or equity interests may be transferred and what type of internal governance framework applies. They also set the limits and specific powers of the administrative body.

Although the Andorran Companies Act establishes a minimum mandatory content, well-drafted articles are, in practice, a core instrument of legal certainty, internal cohesion and conflict prevention. When prepared carefully, they anticipate problems, prevent contradictory interpretations and provide long-term stability for both shareholders and third parties.

🏛️ What exactly are the articles of association?

The articles constitute the company’s internal and public rulebook. Unlike the shareholders’ agreement —which is private— the articles are enforceable against third parties, binding on shareholders and directors, and registered with the Andorran Companies Registry.

➤ To understand the practical distinction, you may find the article Shareholders’ agreements: what they are for and when they become essential helpful.

📜 Minimum mandatory content of the articles

Andorran corporate legislation establishes a set of essential elements that must be included in the articles of association.

🟦 Company name

The name must specify the company’s legal form: SA or SL.

You may consult the article SA or SL in Andorra: real differences and how to choose the right structure for further guidance.

🟦 Corporate purpose

The articles must define the activity or activities the company will carry out. The purpose must be lawful, clear and sufficiently specific to avoid restrictive interpretations.

However, this alone is not sufficient to operate. Additional licences and permits may be required afterwards. For more details, see the article Opening a business in Andorra and obtaining commercial authorisation: key requirements and regulations.

🟦 Registered office

The registered office must be located in Andorra, at a place where the company conducts its activity, has an administrative office or a management centre. It is the official address for notifications and the one recorded in the Companies Registry, whereas a commercial premises does not appear in the registry (except for the commercial licence).

🟦 Duration

Most companies are incorporated for an indefinite duration unless the shareholders decide otherwise. The principle of going concern also underpins the Andorran accounting framework.

To better understand the Andorran accounting system, see the article Accounting in Andorra: origins and structure of the General Accounting Plan (PGC).

🟦 Share capital

The articles must specify:

• the amount of the share capital
• its division into shares or equity interests
• their nominal value
• their numbering
• whether different classes or series exist (particularly in SAs)

For further detail, see the article Share capital in Andorra: minimums, contributions and how to structure it safely.

🟦 Administrative body

The articles must indicate:

• whether the company is managed by a sole director, joint directors, joint-and-several directors or a board of directors. For more information, see the article The board of directors in Andorran companies: composition, functions and liability
• how the administrative body operates
• the term of office (if not stated, it is indefinite)
• the system of representation, individual or joint
• whether or not directors are remunerated. The article How to remunerate shareholders and directors legally and tax-efficiently explains the available options

➤ To explore the subject in more depth, you may consult the article Company directors in Andorra: liability, requirements and who can be appointed

🟦 Transfer regime

Particularly relevant in SL structures, which are subject to stricter restrictions. The article SA or SL in Andorra: real differences and how to choose the right structure will help you understand these nuances.

The articles must specify whether pre-emption or withdrawal rights apply, whether the company’s prior consent is required, whether there are restrictions on third-party entry, or whether mandatory transfer clauses may apply.

🟦 General meeting

The articles must regulate notice requirements, quorum, voting majorities, powers of the meeting, voting systems and rules on attendance and representation.

🟦 Distribution of profits

They must set out how and when dividends may be distributed and how the legal reserve applies.

To understand the tax treatment of dividends, see the article How financial income is taxed in Andorra.

🟦 Grounds for dissolution

These include those provided by law and others freely agreed by the shareholders. Common examples are sustained negative results or lack of governance viability.

🧩 Recommended clauses to strengthen legal certainty

Beyond the statutory minimum, robust articles often include additional clauses that improve governance and prevent future disputes, such as:

• an internal protocol for resolving disputes between shareholders
• drag-along and tag-along clauses (especially in SAs) — see our specialised article
• specific restrictions on transfers
• special powers for directors and internal delegations, or rights attached to particular roles
• arbitration or mediation procedures to avoid lengthy litigation and governance deadlock
• an internal regulation for the board of directors where applicable

⚖️ Bylaws vs shareholders’ agreement: what you must understand

Although often confused, they are distinct instruments with different legal effects.

• The bylaws are public, registered, enforceable against third parties and binding on all.
• The shareholders’ agreement is a private contract binding only the signatories, except where its clauses are incorporated into the articles.

A practical rule of thumb:

• anything affecting governance, essential rights or relations with third parties , is recommendeds to be included in the bylaws
• anything relating to internal shareholder relationships that should not be public, it usually belongs in the shareholders’ agreement

It is worth noting that a shareholders’ agreement, although private, differs from an ordinary civil contract due to the complexity of amending it.
Anything elevated to a public deed enjoys stronger legal protection.

🔍 How are the bylaws amended?

Amending the articles requires a formal procedure that includes:

• a resolution of the general meeting with the required majorities
• execution of a notarial deed
• mandatory registration with the Companies Registry

Without registration, amendments do not produce effects vis-à-vis third parties, so timely formalisation is essential.

🧠 Best practices for drafting strong and reliable articles

Drafting the articles requires accuracy and foresight. Some recommendations include:

• defining a sufficiently broad corporate purpose without including regulated activities unless there is a genuine intention to carry them out
• carefully structuring the transfer regime for shares or equity interests
• establishing a clear and consistent administrative system
• incorporating appropriate control and protection mechanisms
• avoiding generic templates not adapted to the company’s real activity (unfortunately common in Andorra)
• ensuring strict coherence between the articles and the shareholders’ agreement, where applicable
• reviewing the articles periodically or when relevant legislative changes occur

Conclusion

The bylaws are far more than a mere formality. They form the backbone of corporate governance, define a clear operational framework, protect shareholders and guide directors in their duties. When designed properly, they provide stability, prevent conflicts and inspire confidence among investors and third parties.

Too often, certain service providers rely on standardised templates that fail to address the client’s real needs. To understand this difference, see the article Differences between managers, advisers and consultants: which one does your business need?

In Andorra, with a flexible yet technical corporate framework, having bespoke articles adapted to your project is essential for ensuring safe and efficient operations. Moreover, given the growing prevalence of international structures, articles aligned with both local and international realities are increasingly indispensable.

📞 If you wish to incorporate a company securely, or review, expand or amend your current articles of association, we are fully at your disposal.

At ELYSIUM, we have extensive experience drafting articles, modifying corporate structures, resolving banking issues and managing international operations. Make use of our expertise: get in touch through our form or schedule a meeting below.
Our commitment is your advantage.

Last updated: November 2025