An Article of Association contains the rules, regulations and bye-laws that are framed for the internal management of the company. They are framed with the object of carrying out the aims and objectives of the organisations as set out in the Memorandum of Association of the company.
In framing the Article of Association, caution must be taken to see that the framed regulations do not bypass the powers of the company.
Contents Of Article of Association:- Share Capital, Rights of Shareholder, variation of these rights, payment of underwriting commission.
- Lien on Shares
- Transfer of Shares
- Transmission of Capital
- Forfeiture of Shares
- Calls on Shares
- Conversion of shares into stocks
- Share Warrant
- Alteration of Share Capital
- General Meeting and Proceeding thereat
- Voting right of members, voting and poll proxies
- Directors, their appointment, remunerations, qualification, powers and proceedings of the Board of Directors.
- Manager
- Secretary
- Dividend and Reserve
- Accounts, audit and borrowing powers
- Capitalisation of profits
- Winding up.
Incase a company desires its shares to be listed in the stock exchange; it must consider the requirements of the stock exchange while framing its Articles of Association.