Articles of Association and Contents of Articles in Business Memorandum

Articles of Association:

Articles are the rules, regulations and bye-laws for the internal management of the affairs of a company. They are framed with the object of carrying out the aims and objects as set out in the memorandum of Association. They are as such subordinate to, and controlled by, the Memorandum of Association.

Contents of articles:

Articles usually contain provisions relating to the following matters:

Share capital, rights of shareholders, variation of these rights, payment of commissions, share certificates

Calls on shares

Transfer of shares

Transmission of shares

Forfeiture of shares

Conversion of shares into stock

Share warrants

Alteration of capital

General meetings and proceedings there at

Voting rights of members, Voting and poll, proxies

Directors, their appointment, remuneration, qualifications, powers and proceedings of board of directors

Manager

Secretary

Dividends and reserves

Accounts, audit and borrowing powers

Capitalisation of profits

Winding up

Companies which must have their own Articles:

The following companies shall have their own articles, namely,

Unlimited companies,

Companies limited by guarantee,

Private companies limited by shares,

The Articles shall be signed by the subscribers of the Memorandum and registered along with the Memorandum,

A public company may have its own Articles of Association. If it does not have its own Articles, it may adopt Table A given in schedule I to the Act

Regulations required in case of an unlimited company, a company limited by guarantee and a private company

Unlimited company: In the case of an unlimited company, the Articles shall state-

The numbers with which the company is to be registered, and

If it has a share capital, the amount of share capital with which the company is to be registered

Company limited by guarantee: The case of a company limited by guarantee, the articles shall state the number of members with which the company is to be registered.

Private company: In the case of a private company having a share capital, the Articles shall contain provisions which-

Restrict the right to transfer shares,

Limit the number of its members to 50 (not including employee-members), and

Prohibit any invitation to the public to subscribe for any shares in, or debentures of, the company.

Form of Articles in the case of other companies:

The Articles of any company, not being a company limited by shares, shall be in such one of the Forms in Tables C,D, and E in schedule I to the Act

Such a company may include any additional matters in its Articles in so far as they are not inconsistent with the provisions

Form and signature of Articles:

Printed,

Divided into paragraphs, and

Signed by each subscriber of the Memorandum (who shall add his address, description and occupation, in the presence of at least l witness who will attest the signature and likewise add his address) description and occupation.

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