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ARTICLES OF ASSOCIATION

Presented by:

Omprakash Pateriya

M.B.A. 1st sem c

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DEFINATION:

The article of association of a company are

its bye-law or rules and regulations that

govern the management of its internalaffairs and the conduct of its business.

It is prepared under company act of 1956

under section 2(2).

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Basically the company canbe needed AOA classified

in three types:

1. Private company limited by shares

2. Private company limited by guarantee

3. Private unlimited company

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The nature of Articles may be

explained as follows:

Articles of association are subordinate tomemorandum of association.

The articles are controlled by memorandum.

Articles help in achieving the objectives laid down inthe memorandum.

Articles are only internal regulation over whichmembers exercise control.

Articles lay down the regulations of governance ofthe company.

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Articles of Association Advantages:

Minimum subscription is not required.

Company's can easily raise the sufficient capitalthrough shares.

These are appropriate for the business persons whohave the limited capital.

Even the non resident shareholders are notresponsible for the additional tax on dividends.

Accounts of any currency can be freely transferable

without any exchange control restrictions.

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Articles of Association

Disadvantages:

The expenses for the company formation are very high.

The alteration of article is not so easy.

The procedure for the establishment and the legal formalities

are very complicated. The administrative costs and the tax payment are very high.

In the private company shares cannot be sold to the public.

The problem of management occurs when directors are notable to manage the company as the sole traders do.

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Alteration of Articles of Association

The articles of association can be altered by assign a specialresolution. Certain restrictions are imposed on the nature andextent of the alternation that may be made.

The change should not be violating the provisions of theCompanies Act.

It should not be contrary to the provisions of the memorandumof association.

The alteration must not have anything illegal.

The alteration should not adversely affect the minorityshareholders.

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ARTICLES OF ASSOCIATIONContent of AOA:

Interpretation section

Members No. of members with which the company

shall be initially registered

Admission of members over and above theinitial members

Resignation by a member

Suspension of a member

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ARTICLES OF ASSOCIATION

3. General meeting

4. Notice of general meetings

5. Proceedings at general meetings6. Board of Directors

7. Disqualification of Board members

8. Term of office of the BoD9. Proceedings of the BoD

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ARTICLES OF ASSOCIATION

10. Officers of the Company ( Secretariat)

11. Advisory Board

12. Seal13. Indemnity The amount not stated

14.Regulations

15. Dispute resolution

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ARTICLES OF ASSOCIATION

16. Amendment of the MEMARTS

17. Dissolution and disposal of property

18. Subscribers/members

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Thank you.