Question

Write short notes on the following :
Contents of Articles of Association.

Answer 1

CONTENTS OF ARTICLE OF ASSOCIATION---

1. Share capital including sub-division, rights of various shareholders, the relationship of these rights, payment of commission, share certificates.
2. Lien of shares: Lien of shares means to retain possession of shares incase the member is unable to pay his debt to the company.
3. Calls on shares: Calls on shares include the whole or part remaining unpaid on each share which has to be paid by the shareholders on the company’s demand.
4. Transfer of shares: The articles of association include the procedure for the transfer of shares by the shareholder to the transferee.
5. Transmission of shares: Transmission includes devolution of title by death, succession, marriage, insolvency, etc. It is not voluntary but is in fact brought about by operation of law.
6. Forfeiture of shares: The articles of association provide for the forfeiture of shares if the purchase requirements such as paying any allotment or call money, are not met with.
7. Surrender of shares: Surrender of shares is when the shareholders voluntary return the shares they own to the company.
8. Conversion of shares in stock: In consonance with the articles of association, the company can convert the shares into stock by an ordinary resolution in a general meeting.
9. Share warrant: A share warrant is a bearer document relating to the title of shares and cannot be issued by private companies; only public limited companies can issue a share warrant.
10. Alteration of capital: Increase, decrease or rearrangement of capital must be done as the articles of association provide.
11. General meetings and proceedings: All the provisions relating to the general meetings and the manner in which they are to be conducted are to be contained in the articles of association.
12. Voting rights of members, voting by poll, proxies: The members right to vote on certain company matters and the manner in which voting can be done is provided in the articles of association.
13. Directors, their appointment, remuneration, qualifications, powers and proceedings of the boards of directors meetings.
14. Dividends and reserves: The articles of association of a company also provide for the distribution of dividend to the shareholders.
15. Accounts and Audits: The auditing of a company shall be done subject to the provisions of the articles of association of the company.
16. Borrowing powers: Every company has powers to However, this must be done according to the articles of association of the company.
17. Winding up: Provisions relating to the winding up of the company finds mention in articles of association of the company and must be done accordingly.