A company’s Article of Association (AoA) defines the rights and obligations of its members. It must contain the company’s name and all other names and abbreviations used in its daily affairs. A private company must include the words “limited liability company” and the abbreviation “ltd.” The AoA must state these things in two languages. When the AoA is changed, a special resolution must be passed by the Board of Directors to implement it.
While this argument may seem weak and not terribly persuasive, it does not address the core issue at hand – whether a Company AoA must be amended to include the Shareholders Agreement. This document is the “bedrock” of the company and is binding on all its stakeholders. The Supreme Court ruled that a company’s AoA represents the shared understanding among all stakeholders. Hence, it is vital to read and understand the company’s AOA carefully.
A company’s Articles of Association are necessary for the smooth functioning of its operations. They regulate the conduct of employees and govern the internal governance of the company. In most cases, they act as a guide for complying with a company’s Memorandum of Association. Although they are considered to be subordinate to the MoA, the Articles of Association are an important part of a company’s operation. So, it’s vital to understand the importance of a Company AOA before signing a Memorandum of Association or Company MoA.
Articles of Association or Company Memorandum are vital charter documents. They specify the goals and regulations of the business, and set the rules and regulations for its administration. Ultimately, the AOA must be in line with the Memorandum in order to achieve the objectives of the company. A recent case from the Supreme Court has stated that the purpose of the AOA is to create a contract between the members of a company. And while this is true, a Company’s Articles of Association need to be revised to keep pace with ever-changing regulations.
The Memorandum of Association and Articles of Association are complementary documents. The Memorandum of Association contains the basic data that a company needs to incorporate itself, while the Articles of Association follow the rules and regulations formulated in the Memorandum of Association. While the Memorandum of Association is more detailed than the Articles of Association, they still complement each other. You can’t do without either one. And the two documents should be read together in order to ensure proper management.