The Articles of Association is a document that contains the purpose of the company as well as the duties and responsibilities of its members defined and recorded clearly. It is an important document which needs to be filed with the Registrar of Companies.
So let me first tell you what is Articles of Association (AOA)?
As we know Memorandum of Association defines Why What, Where and Who of the company and A company’s Articles of Association (AOA) is a primary declaration of the company’s nature, purpose and ends. Articles of Association must be submitted at the time of application for incorporation. They define clearly the responsibilities of the directors, the kind of business to be undertaken, and the means by which the shareholders exert control over the board of directors.
Also Read : Private Limited Company
Generally, the articles of association contain
As is evident, an Articles of Association must contain all the information regarding who holds the power distribution among directors, officers, shareholders etc, who holds right of vote and veto, the nature and form in which the primary business of the company is to be carried out.
- Voting Rights of Members.
- List of Intellectual Rights.
- How the shares are allocated and the manner in which the shares have to be handled.
- Allocation of Capital.
- Procedure of electing Chairman and his voting Rights.
- List of Directors, their appointment, remuneration, qualification, powers and proceedings of Board of Directors meeting.
- Board of Directors and their power.
- Alteration of Capital.
- Dividend and Reserve.
- General Meeting and its procedure.
- Borrowing Powers.
- Process for dissolution of Company or Winding Up.
Must Read : Memorandum of Association
***Frequently asked question about Articles of Association.
Q 1. Is it mandatory to file Articles of Association for registering a Company?
Ans: Memorandum of Association is must for company, but Articles of Association is not so. It is not must for companies limited by shares to have its own Articles of Association.
Q 2. Where the Articles of Association has to filed?
Ans: Articles of Association have to filed with the Registrar of Companies (ROC) at the time of incorporation of a Company.
Q 3. Should I make the Articles of Association public?
Ans: Articles of Association has to be printed and made it public to the shareholders and potential investors.
Q 4. Can Articles of Association violate Memorandum of Association?
Ans: Articles of Association can not violate Memorandum of Association.
Q 4. Can I alter the Articles of Association?
Ans: Yes, Company can alter Articles of Association through a special resolution.
You can read complete Act here http://www.mca.gov.in/Ministry/pdf/Companies_Act_1956_13jun2011.pdf