INTRODUCTION

• Articles of association are a document that specifies the

regulations for a company's operations and defines the
company's purpose.
• The document lays out how tasks are to be accomplished within
the organization, including the process for appointing directors
and the handling of financial records.
• Articles of association can be thought of as a user's manual for a
company, defining its purpose and outlining the methodology
for accomplishing necessary day-to-day tasks.
• While the content and terms may vary according to jurisdiction,
articles of association generally include provisions on the
company name, its purpose, the share capital, the company's
organization, and provisions concerning shareholder meetings.
• They are related to the internal working or management of
the company.
• It plays a very important role in the affairs of a company.
• It deals with the rights of the members of the company
between themselves.

• U/S 2(5)- Articles

• U/S 5(1)- regulation- management of the company
• U/S 5(2)- Rule 11 Companies (Incorporation) Rules, 2014
• U/S 7(1)- Incorporation
FORMALITIES
• Articles of association shall be:
• Printed
• Divided into paragraphs numbered consecutively
• Signed by each signatory of the memorandum in the presence
of atleast one attesting witness
• Also articles should not contain anything which is against:
• LAW OF THE LAND
• THE COMPANIES ACT
• THE PUBLIC POLICY
• ULTRAVIRES THE MEMORANDUM
• Any such clauses shall be inoperative and void.
 CONTENTS
• 1. Classes of shares, their values and the rights attached to each of them.
• 2. Calls on shares, transfer of shares, forfeiture, conversion of shares and
alteration of capital.
• 3. Directors, their appointment, powers, duties etc.
• 4. Meetings and minutes, notices etc.
• 5. Accounts and Audit
• 6. Appointment of and remuneration to Auditors.
• 7. Voting, poll, proxy etc.
• 8. Dividends and Reserves
• 9. Procedure for winding up.
• 10. Borrowing powers of Board of Directors and managers etc.
• 11. Minimum subscription.
• 12. Rules regarding use and custody of common seal.
• 13. Rules and regulations regarding conversion of fully paid shares into
stock.
• 14. Lien on shares.
• The Articles of the company shall be in the form provided in
Schedule I, i.e.
• Table F: For a company limited by shares;
Table G: For a company limited by guarantee and having a
share capital;
Table H: For a company limited by guarantee and not having a
share capital;
Table I:  For a unlimited company and having share capital;
Table J: For a unlimited company and not having a share
capital;
Entrenchment
• The articles of association may contain entrenchment provisions.
However, this concept of entrenchment was not present in the
Companies Act, 1956.
• The word entrench means to establish an attitude, habit, or belief so
firmly that change is very difficult or unlikely.
• Thus, an entrenchment clause is the one which makes certain
amendments either impossible or difficult.
• The company has the discretion to include entrenchment provisions in
its articles of association.
• Such provision may relate to the effect that specified provisions of the
articles may be altered only if conditions or procedures as that are
more restrictive than those applicable in the case of a special
resolution, are met or complied with.
• An entrenchment provision can be made at the time of incorporation
of the company, or after the incorporation of the company by way of
an amendment to the articles of association of the company.