The Articles of Association is similar to a rule book, within a company. This document contains internal detailed governing aspects of the company’s organisation. These include shares, details in manner of holding the company meetings, the role and powers of the directors.
Every company formed in India under Companies Act is required to have articles, without which a company cannot legally be formed. This requirement applies to all types of Companies.
Features of Articles of Association:
1. It is a part of the constitution of an organization.
2. A contract between the members and among the members themselves.
3. It lays down the duties of shareholders.
4. Few statutory clauses should be included in the article of associations. Other clauses can be chosen to make the bye-laws of the organization.
5. Article of Association can be inspected by anyone as they are a public document.
The article of a company is an important document which is company’s rule book, defines the responsibilities of its directors, the different means by which the shareholders may exert their control over the directors and the company. While the memorandum defines the objectives of the company, the articles lay down the rules through which the objectives are to be achieved. In cases of conflict, Act overrides the Articles.
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