Articles of Association
The second most important document for Joint Stock Company is the Articles of Association. It is a document that contains the purpose of the company as well as the duties and responsibilities of its members defined and recorded clearly. The document that contains all rules and regulations regarding daily activities and internal management of the company is called Articles of Association. The article of association is a contract (1) between the members (stockholders, subscribers) and the organization and (2) among the members themselves. It sets out the rights and duties of directors and stockholders individually and in meetings. It defines the company’s purpose and lay out how tasks are to be accomplished within the organization. Together with the memorandum of association, they constitute the constitution of a company.
The few definitions are as follows:
Lord Cairns: “Articles of Association is an important document of the company that explains the power, right and responsibility of the directors; includes the system and theory of how to operate the business and actuate the system and method of how to bring change in the rules and regulations of the company’s internal Operation of various times.”
Charles Worth & Cain: “The Articles of Association are the regulations for the internal arrangements and management of the company”.
Sen & Mitra: “The Article of association is a document which contains rules, regulations, and bye-laws regarding the internal management of the company.”
Above all, we can say that an article of association is a document describing the purpose, place of business, and details of a company. It constitutes a contract between the company and its members, set out the voting rights of stockholders and the conduct of stockholders’ and directors’ meetings, and detail the powers of management of the company.