Articles Of Association
The articles of association are the foundational documents of a company. They are legally binding contracts between the company and its shareholders. They define the company’s name, registered office address, purpose, authorized share capital, and other important details.
Key Components of Articles of Association:
1. Company Name:– The company must have a unique name that is not similar to any other company name in the same jurisdiction.
2. Registered Office Address:– The company must have a registered office in the jurisdiction where it is incorporated.
3. Purpose:– The articles of association specify the company’s purpose, which must be clearly defined.
4. Authorized Share Capital:– The articles of association specify the company’s authorized share capital, which determines the maximum amount of capital that the company can raise.
5. Liability of Shareholders:– The articles of association specify the liability of shareholders, which can be limited or unlimited.
6. Subscription Clause:– This clause describes the initial subscribers to the company and their agreement to form the company.
7. Association Clause:– This clause specifies the manner in which shareholders can associate and exercise their rights.
8. Indemnity Clause:– This clause provides for indemnification of directors and officers against certain liabilities.
9. Alteration Clause:– This clause describes the procedure for altering the articles of association.
10. Winding-Up Clause:– This clause describes the procedure for winding up the company.
Procedure for Filing Articles of Association:
- The articles of association must be filed with the relevant authorities in the jurisdiction of incorporation.
- The articles must be correctly numbered and signed.
- The filing fee must be paid.
Consequences of Not Filing Articles of Association:
- Failure to file the articles of association on time may result in fines or other penalties.
- The company may not be recognized as a legally binding entity.
Additional Notes:
- The specific content and format of the articles of association may vary depending on the jurisdiction.
- It is recommended to consult with an attorney to ensure that the articles of association are compliant with local laws.
FAQs
What do you mean by Articles of Association (AoA)?
Articles of Association (AoA) are a legal document that outlines the internal rules and regulations governing the management of a company. It specifies how the company will be run, including the rights and responsibilities of directors and shareholders.
What is AoA and what are its contents?
The AoA contains important provisions such as the company’s structure, the roles of directors, shareholder meetings, dividend distribution, and procedures for issuing shares. It essentially defines how the company will operate internally.
What is the difference between AoA and MoA?
The Memorandum of Association (MoA) defines the companyโs external relationships and scope of activities, like its objectives and powers. The Articles of Association (AoA) regulate the companyโs internal management. Together, these documents form the company’s constitution.
How do you get the AoA of a company?
You can obtain the AoA of a company from its registered office or online via government portals where companies are required to file their AoA, such as the Ministry of Corporate Affairs (MCA) in India.
What is an example of an Article of Association?
An example of an article in the AoA might specify the process for appointing directors, such as the required qualifications and how they can be removed from their positions by shareholders.
