ARTICLES OF ASSOCIATION

Done by,
NEETHU V.T
 ARTICLES OF ASSOCIATION
“Articles” means the Articles of Association of a
company as originally framed or as altered from time
to time in pursuance of any previous companies law
or of this Act” [sec 2(2)]

Articles of Association must be ,

• Printed

• Divided into paragraphs

• Numbered consecutively &

• Signed by each subscriber

The following companies which must have their own
Articles,
a) Private companies limited by shares

b) Companies limited by guarantee

c) Unlimited companies
 CONTENTS OF ARTICLES OF
ASSOCIATION
 The business of the company
 The share capital, different classes of share, rights of
different classes of shareholders.
 Execution or adoption of preliminary contracts

 Procedure of allotment of shares

 Procedure of issuing share certificate

 Procedure of transfer and transmission of shares

 Calls on shares, forfeiture of shares, lien on shares

 Issue of share warrants
 Alteration of share capital

 Borrowing powers of the company

 Rules regarding meeting

 Voting rights of members

 Dividends and reserves

 Capitalisation of profits

 Common seal of the company

 Payment of interest out of capital

 Winding up
 ADVANTAGES OF ARTICLES OF
ASSOCIATION
  Itprovides that rights and obligations of shareholders &
establish an internal management system to manage the
company's internal basis.
 Articles  publicly stated its purpose, business scope, capital
amount ,form of liability etc., for investors, creditors and third
party contacts .
 Company's articles implement internal management &
external economic relations of the fundamental legal basis. 
 LIMITATIONS OF ARTICLES OF
ASSOCIATION
 Articles can never be altered by an ordinary
resolution, altered only by special resolution.
 Alteration should not be illegal or against public
policy
  The articles must not be inconsistent with the
conditions contained in the memorandum
 Approval of central government is also required in
certain cases
 DIFFERENCE BETWEEN
MEMORANDUM AND ARTICLES OF
ASSOCIATION
 MOA  AOA
 It being the charter of the  They are subordinate to the
company, is the supreme memorandum
document
 It must be registered at the  The articles may or may not
time of incorporation. be registered.

 The memorandum contains  The articles provide the

the objectives and powers regulations by which those
of the company. objectives and powers are to
be conveyed into impact.
 It is the constitution of the
company
 Defines the relation
between company and
outsider.
 It cannot be altered easily
 The ‘Rule of Ratification’
does not apply to Acts
ultravires the
memorandum
 These are internal regulations of
the company
 Regulates the relationship
between company and its
members and also between the
members inter se.
 They can be altered easily by
passing special resolution
 The ‘Rule of Ratification’
applies to the Acts ultravires the
Articles but intra- vires the
memorandum.
THANK YOU..