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What is articles of association?

The Articles of Association, also referred to as the Articles of Incorporation or simply the Articles, are a legal document that sets out the internal rules, regulations, and governance structure of a company or organization. They define the rights, responsibilities, and relationships between the company’s shareholders, directors, and other key stakeholders.

The Articles of Association typically cover a range of important aspects, including:

1. Company Name and Registered Office: The document specifies the company’s official name and registered address.

2. Objectives and Purpose: It outlines the company’s objectives, business activities, and the scope of its operations.

3. Share Capital and Shareholders: The Articles detail the authorized share capital of the company, the different classes of shares, and the rights and obligations of shareholders.

4. Directorship and Management: The roles and responsibilities of directors, their appointment, removal, and powers are outlined in the Articles. The document may also include provisions for the board structure and decision-making processes.

5. Shareholder Meetings: The Articles define the rules for convening and conducting shareholder meetings, including procedures for voting, proxies, and resolutions.

6. Dividends and Financial Matters: The document may specify how profits are distributed among shareholders, dividend policies, and financial reporting requirements.

7. Transfer of Shares: The Articles may include provisions regarding the transfer and transmission of shares, including any restrictions or conditions.

8. Amendments and Alterations: Procedures for amending or altering the Articles themselves are typically included, specifying the necessary majority or consent required.

The Articles of Association serve as a key document in the legal framework of a company and provide a foundation for its governance and operations. They help ensure transparency, define the rights and responsibilities of stakeholders, and guide decision-making processes within the company. The Articles are typically prepared during the company’s incorporation and may be amended as needed through proper procedures, such as shareholder approval or special resolutions.