ARTICLES OF ASSOCIATION

Presented by:
Omprakash Pateriya
M.B.A. 1st sem “c”
 DEFINATION:
The article of association of a company are
its bye-law or rules and regulations that
govern the management of its internal
affairs and the conduct of its business.
It is prepared under company act of 1956
under section 2(2).
Basically the company can
be needed AOA classified
in three types:
1. Private company limited by shares

2. Private company limited by guarantee

3. Private unlimited company

 The nature of Articles may be
explained as follows:
• Articles of association are subordinate to
memorandum of association.
• The articles are controlled by memorandum.
• Articles help in achieving the objectives laid down in
the memorandum.
• Articles are only internal regulation over which
members exercise control.
• Articles lay down the regulations of governance of
the company.
Articles of Association Advantages:

• Minimum subscription is not required.

• Company's can easily raise the sufficient capital
through shares.
• These are appropriate for the business persons who
have the limited capital.
• Even the non resident shareholders are not
responsible for the additional tax on dividends.
• Accounts of any currency can be freely transferable
without any exchange control restrictions.
 Articles of Association
Disadvantages:
• The expenses for the company formation are very high.
• The alteration of article is not so easy.
• The procedure for the establishment and the legal formalities
are very complicated.
• The administrative costs and the tax payment are very high.
• In the private company shares cannot be sold to the public.
• The problem of management occurs when directors are not
able to manage the company as the sole traders do.
Alteration of Articles of Association

• The articles of association can be altered by assign a special

resolution. Certain restrictions are imposed on the nature and
extent of the alternation that may be made.
• The change should not be violating the provisions of the
Companies Act.
• It should not be contrary to the provisions of the memorandum
of association.
• The alteration must not have anything illegal.
• The alteration should not adversely affect the minority
shareholders.
 ARTICLES OF ASSOCIATION
Content of AOA:
• Interpretation section
• Members
• No. of members with which the company shall be
initially registered
• Admission of members over and above the initial
members
• Resignation by a member
• Suspension of a member
 ARTICLES OF ASSOCIATION
3. General meeting
4. Notice of general meetings
5. Proceedings at general meetings
6. Board of Directors
7. Disqualification of Board members
8. Term of office of the BoD
9. Proceedings of the BoD
 ARTICLES OF ASSOCIATION
10. Officers of the Company ( Secretariat)
11. Advisory Board
12. Seal
13. Indemnity – The amount not stated
14.Regulations
15. Dispute resolution
 ARTICLES OF ASSOCIATION

16. Amendment of the MEMARTS

17. Dissolution and disposal of property
18. Subscribers/members
Thank you.