Is a transfer of shares valid if carried out in contravention of relevant provisions in the articles of association of a private limited company?

The provisions of a company’s articles of association bind a company and its shareholders as contractual terms in accordance with section 33 of the Companies Act 2006 (CA 2006). A company’s articles are likely to contain provisions restricting, or otherwise specifying a particular process in respect of, share transfers—indeed, the model articles for private companies limited by shares (being the articles which would apply to a newly formed company if bespoke articles have not been adopted by such company) (Model Articles), grant a general power to directors to refuse transfers (see article 26(5)). 

However, contracting parties may choose to supplement or replace the Model Articles in their entirety with bespoke articles; and it is common practice for parties to use a shareholders’ agreement between the members to enhance or further supplement such articles. For example, the parties could agree that (i) certain types of transfers are prohibited