An AOA, short for Articles of Association, is a type of program which formulates the rules and regulation of the inside or internal management of the enterprise. It ascertains the powers, rights and the duties of the management of the company. To the Memorandum of Association, also known as the abbreviated MOA, the Article of Association is just a subsidiary.
The Memorandum of Association decides the goals, objectives and aims of the company. On the other hand, the AOA, puts forward the internal mechanism or guidelines which should be followed in order to achieve the goals, objectives and aims of the business. An Article of Association is a great tool which brings clarity within the relationship between the company and its shareholders as well as among just the shareholders themselves. Some of the rules and regulations contained by the AOA include an audit of the company, accounts, the appointments of the directors, rights of voting of the shareholders, transfer of the shares, the share capital and so on.
Different Forms of Articles of Association:
Different Forms of the Articles of Association has been specified by the Companies Act 2013. The following table depicts those forms, from which the company can choose any one as it pleases.
|Table F||Company limited by the shares|
|Table G||Company limited by guarantee and the having share capital|
|Table H||Company limited by guarantee and no having the share capital|
|Table I||Unlimited company and having the share capital|
|Table J||Unlimited company and not having the share capital|
Details specified in the Articles of Association:
The Articles of Association includes rules and regulations regarding the matters as given below:
This segment includes surrender of share, conversion of the shares into stock, transfer of the shares, forfeiture of the shares, call on the shares, subdivision of the share capital and so on.
Appointment of the Directors:
This segment includes the duties, powers, qualification, remuneration and appointment of the director and so on.
Reserves and Dividends:
This includes the rules and regulations related to the distribution of the reserves and the dividend among the shareholders
Audit and Accounts:
This includes the provisions related to the maintenance of the accounting books of the enterprise and the audit of the business
This include the rules and regulations related to the powers of the business so that they can borrow funds from the outside
Method of the Winding Up of the Company:
This includes the provisions which are related to the procedures involving the winding up of the company.
Other Rules and Regulations:
The provisions related to the general meetings and the proceedings are also specified by the Articles of Association. They further include the voting rights of the shareholders using a proxy or a poll, notifications for the meetings, a lien on the shares and so on.
The Articles of Association are a very integral part of the business system. They help a company with their complex and long process significantly.
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