ARTICLES OF ASSOCIATION

INTRODUCTION

The Companies Act, 2013 defines ‘articles’ as the “articles of association of a company originally framed, or as altered from time to time in pursuance of any previous company laws or of the present.” The Articles of Association of a company are that which prescribe the rules, regulations and the bye-laws for the internal management of the company, the conduct of its business, and is a document of paramount significance in the life of a company. The Articles of a company have often been compared to a rule book of the company’s working, that regulates the management and powers of the company and its officers. It prescribes several details of the company’s inner workings such as the manner of making calls, director’s/employees’ qualifications, powers and duties of auditors, forfeiture of shares etc.

However, that the articles of association, are subordinate to the memorandum of association of a company, which is the dominant, fundamental constitutional document of the company. Further, as laid down in Shyam Chand v. Calcutta Stock Exchange, any and all articles that go beyond the memorandum of association will be deemed ultra vires. Therefore, there should not be any provisions in the articles that go beyond the memorandum. In the event of a conflict between the memorandum and the articles, the provisions in the memorandum will prevail. In case of any ambiguity or uncertainty regarding details in the memorandum, it should be read along with the articles.

STATUTORY REQUIREMENTS

The articles must be printed, divided into paragraphs, numbered consecutively, stamped adequately, signed by each subscriber to the memorandum and duly witnessed and filed along with the memorandum. The articles must not contain anything illegal or ultra vires the memorandum, nor should it be contrary to the provisions of the Companies Act, 2013.

CONTENTS OF ARTICLES

The articles set out the rules and regulations framed by the company for its own working. The articles should contain generally the following matters:

o Exclusion wholly or in part of Table F.

o Adoption of preliminary contracts.

o Number and value of shares.

o Issue of preference shares.

o Allotment of shares.

o Calls on shares.

o Lien on shares.

o Transfer and transmission of shares.

o Nomination

o Forfeiture of shares.

o Alteration of capital.

o Buy back.

o Share certificates.

o Dematerialisation

o Conversion of shares into stock.

o Voting rights and proxies.

o Meetings and rules regarding committees.

o Directors, their appointment and delegations of powers.

o Nominee directors.

o Issue of Debentures and stocks.

o Audit committee.

o Managing director, Whole-time director, Manager, Secretary.

o Additional directors.

o Seal

o Remuneration of directors.

o General meetings.

o Directors meetings.

o Borrowing powers.

o Dividends and reserves.

o Accounts and audit.

The provisions of the Companies Act, 2013 shall have effect disregarding anything to the contrary contained in the following:

1. Memorandum or Articles of association of a Company, or

2. In any agreement executed by the Company, or

3. In any resolution passed by the Company in general meeting or by its Board of Directors.

When any matter contrary to the Companies Act is found in Memorandum or Articles of a company or in any agreement or in any resolution as aforesaid, the effect of law is that only that part of Memorandum or Articles or agreement or resolution, as the case may be, which is contrary to the Act becomes void and not the entire Memorandum or Articles or agreement or resolution.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

If you are interested in participating in the same, do let me know.

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at adv.aishwaryasandeep@gmail.com

We also have a Facebook Group Restarter Moms for Mothers or Women who would like to rejoin their careers post a career break or women who are enterpreneurs.

We are also running a series Inspirational Women from January 2021 to March 31,2021, featuring around 1000 stories about Indian Women, who changed the world. #choosetochallenge

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