Article of association is a legal document that specifies the rules and regulations the company will follow post incorporation. Its filed or attached to the company registration form while applying for incorporation with MCA. It’s also referred as AOA.
Companies act 2013 specifies different forms to draft AOA. You can adopt anyone of the following forms based on the type of company that you register:
- Table F – for company limited by shares
- Table G – limited by guarantee and having share capital
- Table H – limited by guarantee and not having share capital
- Table I – unlimited company and having share capital
- Table J – unlimited company and not having share capital
A OPC, private and public limited company always uses Table F.
We have two important business document i.e. Memorandum of Association and Article of association that you must ask for a company to submit in order to understand them better.
AOA of a company clarifies rules and regulations that the company will adopt after its incorporation such as the manner in which company will issue shares, pay dividend, audit its financial records and voting power of shareholders. You can also say its the user manual for the organization used to accomplish the company’s day to day operations.
In this article we have listed 5 most important thing you must check before signing the company’s article of association or AOA.
When you select Table F or any other table of your choice, the form will automatically fill up all the rules and regulations as per companies act 2013. You need to select the field that you want to edit.
Name of the company in Article Of Association
After entering your SRN generated while getting company name approval, it will allow you to enter all the details. You need to cross check the name that you register is matching with the name that is auto populated after pressing prefill button.
If you are not using SPICe form, then you need to attach AOA in paper format after taking signature from subscribers. In this case, you must make sure that the name has been correctly written or else your application for registration may get rejected.
Company definition in interpretation para
You have to define the company in AOA for seeking registration. For instance in case of a private limited company, you need to include following para in AOA;
“The Company is a private Company within the meaning of Section 2(68) of the Companies Act, 2013 and accordingly :-
(a) The right to transfer shares in the Company is restricted in the manner and to the extent hereinafter appearing.
(b) The number of members of the Company (exclusive of persons who are in the employments of the Company, and persons who having been formerly in the employment of the Company, were members of the Company while in the employment and have continued to be members after the employment ceased) shall be limited to two hundred; provided that for the purpose of this definition where two or more persons jointly hold one or more shares in the Company, the shall, be treated as a single member, and.
(c) No invitation shall be issued to the public or subscribe for any securities of the Company.”
This para will define the type of company as per companies act, 2013.
In case of One Person Company, you should include following para in addition to the above paras into AOA;
“The company is a “One Person Company” within the meaning of Section 2 (62) of the Companies Act, 2013 and accordingly limits the number of its member to one person.”
Board of directors
In board of directors para, you state who will be the first director of the company, their remuneration and all other rules and regulations of the company. If you want to change it, select the field on the left side to edit and make changes to it.
If you want your first director to be named in the AOA then you can do so by including their name in this particular clause. You can state who will be the managing director of the company.
As an entrepreneur, you must check that all the directors name is reflecting in the AOA and its matching with the details filled up in the SPICe form for registration.
In subscriber page you need to check if name, address, description and occupation field has been correctly filled up and matching with the details of provided in SPICe form for registration.
If any of the subscribers has director identification number or DIN, then it has to be provided or else Permanent account number has to be mentioned against the persons name.
Each subscriber is required to sign with their DSC if its filed by using SPICe form for registration. Or else, it has to be physically signed and attached to INC-7, in case of more than 7 subscribers. You will not be mentioning the number of shares details proposed to be allotted in AOA.
Subscribers page has to be signed in present of a witness. If you have taken help of a professional to draft it for you, then he or she can be a witness by signing the AOA.
Changes in Article Of Association
When you select table with respect to the type of company you are registering, you will be displayed with all the rules and regulations of the company in e-article of association.
If you have given drafting work to some professional, then he/she must have marked the left side box as edited. You need to check that particular clause to know what exactly has been added to it. In case of any issues, discuss with the concern professional or else you can drop a message to us by using our comment section below. We will be very happy to help you.