The article of association contains the following details −
● The voting powers of officers, directors and shareholders.
● The form of business that the company carries out.
● The form of freedom to change the company’s internal regulations.
● The rights, duties and powers of the company and its members.
● The articles of association records clearly the duties and purpose of the company and its members.
● It is filed with the registrar of companies.
● Every private company, whether a company limited by guarantee or an unlimited company, should be registered with the registrar of companies along with the memorandum according to section 26 of the Companies Act, 1956.
● For a company limited by shares, it is not mandatory to have its own articles.
● A company limited by shares may partly or totally adopt the table A of the Schedule of the Companies Act, 1956.
● If a company limited by shares does not have any articles of association, then the table A of the schedule of the Companies Act will be applied by default, until and unless it is modified.
● There are 3 ways for a company limited by shares −
ü It may totally adopt table A.
ü It may totally exclude table A and form its own articles of association.
ü It may adopt just a part of table A and create its own articles of association.
● It is not needed to register the articles of association of a company if it totally adopts table A.
● For a company adopting table A, it should be mentioned in the memorandum of association that the company has adopted table A as its articles of association.
The articles of a private limited company should contain the following −
● The company must have a specific amount of share capital with which the company is to be registered.
● The number of members included to register the company.
For a company limited by guarantee, the articles must state the total number of members, involving whom, the company is to be registered according to Section 27(2) of the Companies Act, 1956.
● As per Section 30 of the Companies Act, 1956, the Articles of Association must be signed by each subscriber of the memorandum of association in the presence of at least 1 witness.
● The witness must attest the articles with his signature, designation and address.