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An Article of Association ( AoA ) lays down the rules and regulations for the internal management of the company. It specifies the duties, rights, and powers of the management of the company. An Article of Association is subsidiary to the Memorandum of Association(MoA).
A Memorandum of Association specifies the objectives of the company whereas, an Article of Association lays down the internal guidelines to be followed when achieving these objectives of the company. An Article of Association brings clarity in the relationship between the shareholders and the company and among the shareholders themselves. The Article of Association contains the rules regarding the share capital, transfer of shares, voting rights of the shareholders, the appointment of directors, accounts, an audit of the company etc.
An Article of Association contains the rules and regulation regarding the following matters:
Subdivision of share capital, call on shares, forfeiture of shares, transfer of shares, conversion of shares into stock, surrender of shares etc.
Director’s appointment, remuneration, qualification, powers and duties etc.
An Article of Association also specifies the provisions relating to general meetings and proceedings, notices for meetings, voting rights of the shareholders by poll or proxy, a lien on shares etc.