ARTICLES OF ASSOSIATION

At the time of company’s registration ,the Articles of Association is the second most important document of the company, the first being the Memorandum of Association. The Articles of Association is a document which contains the purpose of the company i.e. the Articles of Association consists of the reasons why the company has been incorporated, it denotes the intention of the company. The Articles of Association along with the purpose also contains the duties and responsibilities of the members of the company and they are defined and recorded clearly. The Articles of Association is a very important document for the company and is supposed to be filed with the registrar of companies.

The Articles of Association (AOA) must include:

1. Company name: the company name of a private limited company must include the word “limited liability company” or the abbreviation “limited/ltd”.
2. Company’s place of business: The Company may practice its business in multiple countries but the registered address must be mentioned in the Articles of Association.
3. The company’s field of activity: the term “field of activity “refers to the field in which the company carries on its business activities. Any activity, which may be pursued legally in the form of a limited liability company, can constitute the company’s field of activity. A company may have several field of activity.
4. Share capital: share capital is that part of capital of a company which comes through issuing of share.  For private limited companies and OPCs is Rs. 1 lakh; b. and for public limited companies is Rs. 5 lakh For private limited companies and OPCs is Rs. 1 lakh; b. and for public limited companies is Rs. 5 lakh.
5. Nominal value and number of shares: if the nominal value of each share is defined in the Articles of Association then all the shares of that company must bear the same nominal value.
6. Number of members of the board of directors and auditors as well as the possible deputy members, or the minimum and maximum number thereof: the number of members of the board of directors and auditors as well as the possible deputy members and their term of office may be stated in the Articles of Association. The number of members may also be stated in it.
7. Notice of general meeting of share holders: the Articles of Association may stipulate the manner in which and when the notice of the annual general meeting i.e. AGM of the shareholders must be given. The notice may be given in the newspaper or by personally sending a written notice to the shareholders, etc.
8. The agenda of the annual meeting: The Articles of Association might state the agenda of the Annual general meeting.
9. Accounting period of the company: According to the Auditing Act, the accounting period of the company may be the calendar year or any other period of 12 months. Generally it’s the period which begins from 1^st April and end on 31^st March. Such period is also mentioned in the Articles of Association.
10. Other provisions: in addition to the mandatory provisions, on the discretion of the shareholders, they may include many other provisions in the Articles of Association. However, the additional provisions cannot contradict the mandatory provisions that the company has to follow by law.

Alterations in the Articles of Association

The companies Act states that a company may alter its Articles of Association by passing a Special resolution from time to time subject to i) the provisions of the companies Act. And ii) conditions contained in the memorandum of association.

A copy of such altered Articles of Association should be filled with the registrar of companies within 30days from passing of such resolution and such altered copy should be attached with every copy of the Articles of Association. The fundamental rights of company to alter the Articles of Association are subject to various limitations stated below:

1. it must not exceed the powers given by the MOA.
2. It must not be inconsistent with the companies act.
3. It must not be illegal or against public policies.
4. It must be for the benefit of the company.
5. It should not be against the favor of minority without corresponding benefits of the company as a whole.
6. It must not be inconsistent with any court orders.
7. It cannot have any retrospective effect.

Company vakil keeps in mind all the above provisions of law and all the statutes. We make the drafting of Articles of Association in a manner in which no other can and can assure you the smooth journey of filing it with the registrar.