Home >> Dictionary Of Banking >> Abstract Of Title to Committee Of Inspection >> Articles of Association_P1

Articles of Association

company, regulations, memorandum, shares, contained and registered

Page: 1 2

ARTICLES OF ASSOCIATION. The articles of association are the regulations or bye-laws of a joint stock company by which its affairs are governed.

Subject to the provisions of the memo randum of association, a company can alter or add to the articles. (Sec Section 13. below.) The memorandum forms the boundary to the directors' powers, but within that boun dary the company can make its own rules and regulations. and these are contained in the articles of association.

Before dealing with a company a banker should be careful to make himself acquainted with the memorandum and articles of association of the company, and particularly as to the powers of the directors to borrow and to mortgage the company's property.

Every person dealing with a company is deemed to have notice of the contents of the memorandum and articles.

The following are the provisions contained in the Companies (Consolidation) Act, 1908 : Registration of Articles.

"10. (1) There may, in the case of a company limited by shares, and there shall in the case of a company limited by guarantee or unlimited, be registered with the memorandum articles of association signed by the subscribers to the memorandum and prescribing regulations for the com pany.

" (2) Articles of association may adopt all or any of the regulations contained in Table A. in the First Schedule to this Act.

" (3) In the case of an unlimited company or a company limited by guarantee the articles, if the company has a share capital, must state the amount of share capital with which the company proposes to be registered.

" (4) In the case of an unlimited company or a company limited by guarantee, if the company has not a share capital, the articles must state the number of members with which the company proposes to be registered, for the purpose of enabling the registrar to determine the fees payable on registration.

Application of Table A.

11. In the case of a company limited by shares and registered after the commence ment of this Act, if articles are not registered, or, if articles are registered, in so far as the articles do not exclude or modify the regula tions in Table A. in the First Schedule to this

Act, those regulations shall, so far as appli cable, be the regulations of the company in the same manner and to the same extent as if they were contained in duly registered articles.

Form, Stamp, and Signature of Articles.

" 12. Articles must— (a) be printed ; (b) be divided into paragraphs num bered consecutively ; (c) bear the same stamp as if they were contained in a deed ; and (d) be signed by each subscriber of the memorandum of association in the presence of at least one witness who must attest the signature, and that attestation shall be sufficient in Scotland as well as in England and Ireland.

Alteration of Articles by Special Resolution.

" 13. (1) Subject to the provisions of this Act and to the conditions contained in its memorandum, a company may by special resolution alter or add to its articles ; and any alteration or addition so made shall be as valid as if originally contained in the articles, and be subject in like manner to alteration by special resolution.

(2) The power of altering articles under this section shall, in the case of an unlimited company formed and registered under the Joint Stock Companies Acts, extend to altering any regulations relating to the amount of capital or its distribution into shares, notwithstanding that those regulations are contained in the memorandum." Table A., referred to in the above sections, contains regulations which may be adopted for a company's articles of association, but in many companies special articles are pre pared. The regulations in Table A. relate to :—business, shares, lien, calls on shares, transfer and transmission of shares, for feiture of shares, conversion of shares into stock, share warrants, alteration of capital, general meetings, proceedings at general meeting, votes of members, directors, powers and duties of directors, the seal, disqualifications of directors, rotation of directors, proceedings of directors, divi dends and reserve, accounts, audit, notices.

Page: 1 2