ARTICLES OF ASSOCIATION IN COMPANY DRAFTING
Just like the MOA, the Articles of Association is also equally important. As the provisions of section 2 clause (2) defines an AOA means the by-laws and the statute of the company that administers the internal affairs and conduct of the company.
The companies which should have their own AOA are:
- Private companies limited by shares
- Companies limited by guarantee
- Companies with unlimited liabilities of its members
Points to be taken care of while drafting an AOA
- Companies who are required to have registered articles may or may not adopt all the regulations mentioned in table A of the first schedule of the act and those who fail to do the same the provisions of the table will be applicable to them.
- The companies who fall under the category of the limited by guarantee or unlimited liability will adopt the regulations of the table C, D, E of the schedule 1.
- Contents to be included in AOA are as follows:
- Exclusion wholly or in part of Table A
- Adoption of preliminary contracts
- Capital – Authorized / paid-up
- Allotment of shares, calls on shares, lien on shares
- Specific provisions pertaining to Preference shares, Debentures
- Transfer and transmission of shares, nomination, forfeiture of shares
- Share certificates, De-materialization
- Conversion of shares into stocks
- Voting rights and proxies
- Meetings and rule regarding Committee
- First Directors, Appointment of Managing Directors, Additional Directors, Secretaries and Managers
- Delegation of Powers to directors, remuneration to directors
- Meetings of Board, Committees of Board
- General Meetings
- Accounts, Audit, Borrowing powers, dividend and reserves
- Winding up
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