Articles of Association serve as the internal rulebook for the company, guiding its governance structure, decision-making processes, and relationships between shareholders, directors, and other stakeholders. They provide clarity and certainty in the management of the company’s affairs and help ensure compliance with legal requirements and corporate governance standards.
Key components typically found in Articles of Association include:
Name and Registered Office: The articles specify the company’s name and registered office address, which is the official address for legal correspondence and notices.
Objects or Purposes: This section outlines the primary objectives or purposes for which the company is formed. It defines the scope of the company’s activities and operations.
Share Capital: The articles specify the authorised share capital of the company, including the types of shares, their nominal value, and any rights or restrictions attached to them. This section may also outline procedures for issuing and transferring shares.
Management and Directors: The articles detail the structure and composition of the company’s board of directors, including the appointment, retirement, and powers of directors. It may also specify the procedures for holding board meetings and making decisions.
Shareholders’ Rights and Meetings: This section outlines the rights and responsibilities of shareholders, including voting rights, dividend entitlements, and procedures for calling and conducting shareholder meetings, such as Annual General Meetings (AGMs).
Dividends and Reserves: The articles may specify the company’s dividend policy, including the declaration and payment of dividends to shareholders. It may also address the creation and maintenance of reserves.
Amendments and Alterations: The articles outline the procedures for amending or altering the articles themselves, typically requiring approval by a special resolution of shareholders.
Winding Up and Dissolution: This section addresses the procedures for winding up or dissolving the company, including the distribution of assets to shareholders in the event of liquidation.