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Articles of Association ( AOA ) of Private Limited Company

What is Articles of Association (AOA)?

Articles of Association (AOA) is an important document of Company. It contains the rules and regulations or bye-laws of the company. They are related to the internal working or management of the company. It is mandatory for every company to have its own Article of Association.

The AOA of company are subordinate to the Memorandum of Association and are also governed by the Memorandum of Association. It is binding on the members in relation to the company as well as on the company in its relation to members. 

Objectives of Articles of Association

The Companies Act, 2013 states that the Articles of association:

  • Must include the regulations for the management of the company.
  • Include matters that have been prescribed under the rules.

They do not prevent a company from including additional matters in the AOA or from doing any alterations as may be considered necessary for the functioning of the company affairs.

Features of Articles of Association

The following are some of the features of Articles of Association:

  • It is a part of the constitution of an organization.
  • A contract between the members and among the members themselves.
  • Furthermore, It lays down the duties of shareholders.
  • Few statutory clauses are mandatory in the article of associations. Whereas, other clauses are opted by choice to make the bye-laws of the organization.
  • Article of Association can also be inspected by anyone as they are a public document.

Content of Articles of Association

An AOA contains the rules and regulation regarding the following matters:

Share capital 

Share capital including sub-division, rights of various shareholders, the relationship of these rights, share certificates, payment of commission.

Lien of shares 

To retain or hold the possession of shares in case the member is unable to pay his debt to the company

Transfer of shares

The AOA include the process for the transfer of shares by the shareholder to other person (transferee).

Transmission of shares

Transmission includes title devolution by succession, death, marriage, insolvency, etc.

Surrender of shares

Surrender of shares is when the shareholders voluntary gives back or return the shares they own to the company.

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.

Alteration of capital

Increase, decrease or rearrangement of capital is according to the Articles of association in a company.

General meetings and proceedings

AOA contains all the provisions relating to the general meetings and the manner in which conducted.

Voting rights of members, voting by poll, proxies

AOA also contains the members right to vote on certain matters and manners in which voting done in a company.


AOA also contains directors appointment, remuneration, qualifications, powers and proceedings of the boards of directors meetings.

Dividends and reserves

The Articles of association of a company also provide for the distribution of dividend to the shareholders.

Accounts and Audits

AOA contains the provisions relating to maintenance of books of accounts of the company and audit of the company

Borrowing Powers

Every company has powers to borrow. The Articles of association of the company contains provisions related to borrowing.

Winding Up

The Articles of association also contains provisions related to the winding up of the company.

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Note: This Post was last updated on November 29, 2022

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation i.e. November 29, 2022. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, We assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. We assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL WE SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.

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