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Business Environment and Law-Memorandum And Articles Of Association

Articles Of Association- Memorandum And Articles Of Association

   Posted On :  08.05.2018 07:47 am

The articles of association of a company and its bye laws are regulations which govern the management of its internal affairs and the conduct of its business.

Articles Of Association
 
 
The articles of association of a company and its bye laws are regulations which govern the management of its internal affairs and the conduct of its business. They define the duties, rights, powers and authorities of the shareholders and the directors in their respective capacities and of the company and the mode and form in which the business of the company is to be carried out.
 

Registration Of Articles:

 
 
Section 26 states that a public company limited by shares may register articles of association signed by the subscribers to the Memorandum. There are actually three possible alternatives in which such company may adopt articles: (i) it may adopt Table A in full or, (ii) it may wholly exclude Table A and set out its own regulations in full, or (iii) it may set out its own articles and adopt part of Table A.
 

No Article Company (Sec. 28) :

 
 
A company limited by shares may either frame its own set of articles or may adopt all or any of the regulations contained in Table ‘A’ [Section 28(1)]. But if it does not register any Articles, Table ‘A’ applies.
 

Subject Matter Of Articles/Contents

 
The articles of a company usually deal with the following matters:

1. The business of the company;
2. The amount of capital issued and the classes of shares, and the increase and reduction of share capital;
3. The rights of each class of shareholders and the procedure for variation of their rights;
4. The execution or adoption of a preliminary agreement, if any; the allotment of shares; calls and forfeiture of shares for non-payment of calls;
5. The allotment of shares; calls and forfeiture of shares for non-payment of calls;
6. Transfer and transmission of shares;
7. Company’s lien on shares;
8. Exercise of borrowing powers including issue of debentures;
9. General meetings, notices, quorum, proxy, poll, voting resolution, minutes;
10. Number, appointment and powers of directors;
11. Dividends – interim and final – and general reserves;
12. Accounts and audit;
13. Keeping of books – both statutory and others.

Form And Signature Of Articles [Sections 29 & 30]:

 
 
The articles of association of any company not being a company limited by shares, shall be in one such form in Tables ‘C’, ‘D’, and ‘E’ in Schedule I as may be applicable. Section 30 requires that articles shall be –

1. Printed; 2. divided into paragraphs numbered consecutively; Signed by each subscriber of the Memorandum of association.

Inspection And Copies Of The Articles:

 
A company shall, on being so required by a member, send to him within seven days of the requirement, on payment of one rupee, a copy of the articles.
 

Alteration Of Articles

 
A company may, by special resolution alter or add to its articles. A printed or type written copy of every special resolution altering the articles must be filed with the registrar within 30 days of the passing of the special resolution.

 
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