Question

I govern the internal affairs of the company. Explain who am ‘I’? List out my contents. 

OR 

For the purpose of registering a new company, the promoter requires a document containing the rules and regulations governing its internal affairs.

1. What is that document? Explain. 

2. State the contents of this statement.

Answer 1

Articles of Association: 

The Articles of Association is the second important document of a company. The Articles define the rights, duties and powers of the officers and the Board of directors. It contains the rules regarding internal management of the company. It shows the relationship between the company and its members.

Contents of Articles of Association:

1. The share capital of the company and its division. 

2. Rights of each class of shareholders. 

3. Details of contracts made with different parties. 

4. Procedure for making allotment of shares. 

5. Procedure for issuing share certificate. 

6. Procedure for transfer and transmission of shares. 

7. Procedure for forfeiture and reissue of shares. 

8. Procedure for conducting meetings, voting, proxy and poll 

9. Procedure for appointing, removal and remuneration of directors. 

10. Procedure for declaration of and payment of dividend. 

11. Keeping books of account and audit of the company. 

12. Procedure regarding alteration of share capital.

13. Procedure regarding winding up of the company.

Table A: 

A public limited company may adopt Table A which is a model set of articles given in the Companies Act. Table A is a document containing rules and regulations for the internal management of a company. If a company adopts Table A, there is no need to prepare separate Articles of Association.