Articles of Association (AOA)
In general, the Articles of Association (AOA) is the second most important charter document associated with a company or organization, after the Memorandum of Association (MOA), and these two vital documents together form the magnificent constitution of the related company/organization. This carefully drafted webpage offers very useful information mainly about the articles of association of an incorporated body, to help all pertinent people and entities engaged in various sectors of economy. Here, it must be noted that, the pieces of information provided hereunder about the AOA relate mainly and exclusively to the Indian Companies Act of 2013.
The definition, contents, and overall importance of the articles of association of a company are dealt with separately in the sections below. Here, in this section, some generic facts related with both these charter documents of a company are now being stipulated in brief. The AOA, which is also called as the articles of incorporation in many countries, is mainly concerned with how the related company is run, governed, and owned; while the memorandum of association provides specification about the requirement of establishment of the related company, its capacity and ambit, and its main and ultimate objectives. Thus, the MOA answers every What, Where, Who, and Why related with the company. Again, everything written in the AOA must be in conformance to the matters described in the MOA.
What is Articles of Association(AOA) of a Company in India
This section elucidates "what is AOA of a company in india?", i.e. in Indian context. However, the bulk of the contents of the articles of association of any specified type of company remain the same, irrespective of the location of the company in any country of the world.
Broadly, the articles of association of a company is the vital charter document which stipulates everything about the operations management, corporate governance, regulation and growth, and perpetuity of the business/profession of the related company. Thus, this AOA essentially contains various relevant rules, provisions & regulations, and bye-laws related with all activities and businesses to be undertaken by the company, and also the rights, powers, responsibilities, and specific duties of all people associated with the company. Hence, the AOA of a company is nothing but the strict and wise guidelines for smooth running, efficient management, and the desired profitability and growth of the company concerned. The various spheres to which these guidelines relate, are enlisted separately in the lower section.
Therefore, presence and supervision of a legal expert or a veteran corporate lawyer is prerequisite for appropriate and impeccable drafting of the AOA of a company or organization, who will support in defining and describing the powers, duties, and responsibilities of all involved people and professionals keeping in mind all possible situations and consequences, in order to facilitate proper, flawless, and hassle-free normal and special working of the company. In connection with the articles of association of a company, the most relevant and significant Sections of the Indian Companies Act of 2013 are 5, 6, 10, 14, and 15. The Section 14 provides the provision for making alterations or rectifications in the AOA of a company/organization through a special resolution.
Importance of Articles of Association of a CompanyIt is the Articles of Association of a company or organization, which lays down all rules, provisions, regulations, powers, duties, rights, and responsibilities related with the overall governance and management of the company. These vital and pivotal facts fortify the great importance of articles of association of a company, apart from that of the MOA of the company. These rules, rights, and provisions are related with many more subjects than that listed below:
- Valuation of Intellectual Assets and Rights connected with these
- Appointments of Directors, Auditors, Chairperson, etc.
- All types of Meetings (Board Meeting, General Meeting, etc.)
- Operations Management
- Overall Organization of the Companies Businesses and Transactions
- Rights of Shareholders/Members, including the Voting Rights
- Roles, Powers, and Responsibilities of the Top Management
- Selection and Election Processes and Remunerations
- Management of Accounts and Audits
- Transferability of Shares and Debentures
- Dividend Policy
- Provisions and Measures for Punishing the Wrong-doers
- Alteration of Capital
- Borrowing Powers
- Winding Up of the Company/Organization