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Articles Of Association for 2018

 

The Articles of Association is an important concept of business law. The Articles of association defines those rules and regulations according to which the relationship between the directors of the company in question and its shareholders is governed.

In a number of countries, especially in countries, which follow the principles of the English Common Law, it is necessary to define the articles of association right at the time when the company is established.

The articles of association, along with the memorandum of association, are regarded as the constitution of any company in question. They provide the code of conduct for the company management in all aspects related to company stock.

These aspects include the manner in which shares of the company are issued to shareholders, rights related to voting, and dividend, which comes with the type and quantity of the shares that are issued to shareholders. The conditions and restrictions that apply on the way shares are transferred from one shareholder to another individual or organization are also discussed in the articles of organization.

Similarly on the management front the articles of association defines in detail, the procedure and frequency of the meetings of the board of directors of the company. Similar details are also provided about shareholder meetings. Please note that some other details like quorum of the meeting and other intrinsic details are also clearly specified in the articles of association.

According to the present law related to the articles of association in most countries, the articles of association is considered a statutory instrument.

This concept is drawn from the model articles that are covered under Table A of the Schedule to the Companies Regulation Act, 1985 in the United Kingdom. In most cases, the articles of association of small companies fall under the umbrella of Table A. In some cases, they are considered derivative works of Table A.

The main benefit here is that a company can incorporate under different articles of association. The shareholders are also allowed to amend the articles of association by passing a special resolution.

The Companies Act, 2006 which was brought by Her Majesty’s Government in the United Kingdom and got the Royal Assent in November 2006 is considered to be one of the milestone statutes in world legal history in relation to articles of association.

It will be enforced in October 2008. After its enforcement, there would be no need to file a separate Memorandum of Association. Instead, the articles of association would broaden their spectrum to include the information covered in the memorandum. A number of other countries are considering similar legislations in their country to streamline the concept of Articles of Association.

So, the above description may have provided you the updated information about the articles of association of a company. You can source more information about this topic on the Internet.

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