AMITY GLOBAL BUSINESS SCHOOL

Chandigarh

Articles of association
The articles of association are the rules and regulations of a company framed for the purpose of internal management of its affairs. It deals with the rights of the members of the company inter se. The articles are framed for carrying out the aims and objects of M.O.A

AMITY GLOBAL BUSINESS SCHOOL

Chandigarh

The A.O.A of a company are subordinate to and are controlled by the M.O.A The M.O.A contains only the fundamental conditions upon which alone the company is allowed to be incorporated. The articles should also not authorize the company to do anything which contravenes the provisions of the companies act. if they do, they would be ultra vires the memorandum and will be null and void.

AMITY GLOBAL BUSINESS SCHOOL

Chandigarh

Eg.
According to section 205 of the companies act, a company cannot pay the dividend except out of profits. any provisions in the articles contrary to this provisions of the companies act is void.

AMITY GLOBAL BUSINESS SCHOOL

Chandigarh

Model form of articles

Schedule 1 is divided into tables which serve as a model for various companies. Table A gives a model form of A.O.A. of a co. ltd by shares Table B contains a model form of M.O.A. of a co. ltd by shares Table C gives a model form of M.O.A., A.O.A. of a co. ltd by guarantee and not having a share capital.

AMITY GLOBAL BUSINESS SCHOOL

Chandigarh

Table D gives a model form of M.O.A., A.O.A. of a co. ltd by guarantee and having a share capital. Table E contains a model form of M.O.A., A.O.A. of an unlimited company.

AMITY GLOBAL BUSINESS SCHOOL

Chandigarh

Companies which have their own articles A) private companies limited by shares B) companies limited by guarantee C) unlimited companies

AMITY GLOBAL BUSINESS SCHOOL

Chandigarh

Regulations required in case of an unlimited company ,a company ltd by guarantee and a private company -In case of an unlimited company ,the articles shall state the number of the members ,with which the company is to be registered, and if it has a share capital, the amount of share capital is to be registered[u/s 27(1)]

AMITY GLOBAL BUSINESS SCHOOL

Chandigarh

In case of a company limited by guarantee ,the articles shall state the number of members with which the company is to be registered.[u/s27(2)] In case of private co. the article must contain provisions which -restricts the right to transfer its shares -Limit the number of its members to 50 -Prohibits any invitation or a acceptance of deposits from persons other than its members

AMITY GLOBAL BUSINESS SCHOOL

Chandigarh

Effect of memorandum and articles

-members bound to company -Company bound to members -Member bound to member Company cannot bind any outsider even though the name of the outsiders is mentioned in the articles, The directors are bound by whatever is contained in the articles as they derive their powers from the articles and are subjected to limitations.