Articles of association is the second document which has, in the case of some companies, to be registered along with the memorandum. Companies which must have articles of association are :
1. Unlimited companies.
2. Companies limited by guarantee, and
3. Private companies limited by shares.
This document contains rules, regulations and bye-laws for the general management of the company. Schedule I of the Companies Act, 1956, contains various model forms of memoranda and articles. The Schedule is divided into several Tables. Each table serves as a model for one kind of company. A company limited by shares may either frame its own set of articles or may adopt all or any of the regulations contained in Table A. But if does not register any articles, Table A applies, in so far as its regulations are not excluded. The chief advantage of adopting Table A is that its provisions are legal beyond all doubt.
Form and signature of articles (Section 30)
If articles are proposed to be registered they must be printed. They should be divided into paragraphs, each consisting generally of one regulation and numbered consecutively. Each subscriber of the memorandum has to sign the document in the presence of one attesting witness, both of them adding their addresses and occupation..
Contents of articles
Articles of association may prescribe such regulations for the company as the subscribers to the memorandum deem expedient. The Act gives the subscribers a free hand. Any stipulations as to the relations between the company and its members, and between members inter se may be inserted in the articles. But everything stated therein is subject to the Companies Act. The document must not conflict with the provisions of the Act. Any clause which is contrary to the provisions of the Act or of any other law for the time being in force, is simply inoperative and void. Section 439 of the Companies Act, for example, confers... [continues]
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