ARTICLES OF

ASSOCIATION

 1) Articles of Association of a company contain the rules

and Regulations relating to the Management of its internal
Affairs.
2) It defines the rights, powers and duties of the
Management.
3) It must not contain anything which is against the
memorandum of association or against the companies Act
or Public policy.
4) A public company limited by shares may Register its
own Articles of Association or it may adopt Table A .
5) A company limited by Guarantee with out having share
capital may file its own Articles or may adopt Table C.
6) The Articles of Association must be printed, divided
into paragraphs, numbered consecutively and signed by
each signatory to the MOA in the presence of at least one
attesting witness.

The articles of a company must

contain the following
restrictions.
Restrict the right to transfer shares.
Limit the number of members to fifty.
Prohibit any invitation to the public to
subscribe for any shares in, or debentures
of, the Company.

Contents in the Articles of

Association

Adoption of preliminary contracts.

Number and value of shares
Allotment of shares
Calls on shares
Transfer of shares
Forfeiture,reissue,surrender of shares
Alteration of share capital
Share certificates
Conversion of shares in to stocks
Meetings and proceedings
Voting rights , proxies and polls
Appointment , Remmunaration,etc of Directors
Borrowing powers
Dividend and Reserves
Accounts and audit
Procedure of winding up
Seal of the company

Differentiate between MOA&AOA

AOA
POINTS
MOA
Nature

Charter of the
company

Internal rules and

regulation

contents

Objects and
powers of the
company

Bye-laws for carrying

out the companies
objects

Relations defined

Relations b/w
company and with
outside world.

Relations with
company and its
members

status

Supreme document

Subordinate to the
MOA

FILLING

Must file

Adopt Table A

Alteration

Strict restriction

Altered by resolution

Legal effects

Cannot ratified

ratified

Prospectus
A prospectus is thus any document which invites the public
to provide funds to the company bye law of deposits or
subscriptions to its shares and debentures.
It is a valuable document containing important details about
a company
It should be duly signed by the company.

Important s of Prospectus

It is an invitation to the public to subscribe to the shares and

debentures of the company.
It informs public about the company and stimulates people to
invest money in the company.
It provides an authentic record of the terms and conditions on
which shares and debentures have been issued.
It identifies the persons who can be held responsible for any
untrue or incorrect statements made in it.
It reflects the business policies and programmes of the company.
It helps the investors to take investment decisions.

Contents of the prospectus

Name of the company

Address of the Registered office.
Nature and objects of business
Capital structure
History of the company
Particulars about Underwriters,auditors,brokers,bankers
Date of opening and closing subscription list
Name of stock exchanges where applications for listing
has been made.
Information about material contracts with managerial
personnel
Outstanding liabilities
Financial information.
Consent of managerial personnel
Management perception of risk factors.
Statutory or other information.

Types of prospectus
Shelf prospectus: It is a prospectus issued by
public financial institutions like public sector bank
and scheduled bank
Red -herring Prospectus: It means a prospectus
which does not contain full particulars on price of
the securities offered and their number. It is
issued by companies which raise capital through
the book building process.

Statement in lieu of
prospectus
A public company issue this to the
Registrar of Companies all east three
days before the allotment of shares.

Minimum subscription
Minimum amt of money from the proposed issue of shares
If the minimum subscription is not received within 120 days
of the issue of prospectus, the amt received on applications
must be refunded to the applicants within 10 days.

Minimum subscription
cover following expenses

Preliminary expenses
Underwriting commission
Working capital
The cost of any property; purchased or to
be purchased.
Payment of any money borrowed for the
above purpose
Any other necessary expendeture

Scanning a prospectus from the view point of

an investor
Nature of
business

Prospective investor should examine the condition

of industry, demand and supply etc

Objects

Success and prospects of a company depend on its

objects

management

The standing of the promoters and directors

should be judged

Capital
structure

Minimum subscription ,securities, rights etc

Property
acquired

The amt paid or proposed to be paid for goodwill

and other properties should be carefully
scrutinized.

Past history

Investor checked history of companies especially

existing business liability & assets.

Material
contracts

Details of contracts must mentioned in prospectus

Business
associates&
restrictions

Associated organizations and its reputation and

restrictions in AOA.