These rules and regulations are prepared by the directors of the company for better management and functioning of the company. Limitations of Alteration: The following points should carefully be considered: i Articles must not conflict with Memorandum; ii It must not sanction anything illegal; iii It must not be inconsistent with the Act; iv It must not increase the liability of members; v It must be altered by special resolution only; vi It must not cause breach of contract; vii It must be for the benefit of the company; viii It may be effected with retrospective effect. A company need not carry on its business at its registered office. In case of death or incapability the nominee shall become the member of the company. Dividends Articles 129 141 The Articles provide for the directors to declare and pay dividends, subject to the provisions of the Companies Act, if it appears to them that there are distributable profits available for that purpose. In addition, the directors may resolve that dividends still unclaimed after 12 years be forfeited and returned to the Company. When the even in the same town, the proper intimation needs to be given to the registrar.
Similarly, any new regulation may also be adopted which could have been lawfully included in the original Articles. This makes the registrar to have correspondence with the company. It also shows the company's initial capital. After the 3% level is exceeded, similar notifications must be made where the interest falls below the 3% level or otherwise in respect of increases or decreases of a whole percentage point. A company shall have its registered office.
In the case of companies with object not confined to one state, the states to whose territories the objects extend. In the case of a company having a share capital, the amount of share capital with which the company proposes to be registered and its division into shares of a fixed amount. For example, an officer signing, on behalf of the company, any bill of exchange, promissory note or cheque on which name of the company does not appear as per the above provisions, shall be personally responsible to the holder of such an instrument in case the company fails to make payment. Subscription or Associate Clause — It lays down in detail all information about subscribers and their shares. Secretary, Seals and Documents Articles 124 128 The directors are empowered to appoint the secretary on such terms as they see fit, and also to remove the secretary.
The Articles contain provisions concerning the issue of share certificates, setting out the right of members to receive a share certificate as well as the form and method of execution of the certificate. However, it is very important to register a company legally. A member may also nominate a person to stand for election as a director by executing a notice in terms of the Articles. The proposed name should not be identical with or too closely resemble the name of an already existing company. Lord Cairns in the leading case of Ashbury Railway Carriage Co.
Although, a copy of the special resolution altering the Articles must be filed with the Registrar within 30 days of its passing, together with every copy issued thereafter. Subject to statutory limitations, the Company may by special resolution purchase its own shares or reduce its share capital or share premium account. To invest and deal with the surplus monies of the company not immediately required for the business to purchase or subscribe for shares and securities of any other company or to invest in any mode, to accumulate funds and to invest or purchase or lease any land, buildings, easements, stock-in-trade or other properties which the company may think necessary for the purpose of its business. If any special privileges and rights conferred on any shareholders, it should be clearly mentioned so that the public can be known exactly about the nature of the capital structure of the company. In case of a company limited by guarantee, the liability shall be limited to the amount which a member has agreed to contribute in the event of its liquidation. The Articles also provide for a corporate member to appoint a corporate representative and a person so appointed can exercise the full powers of the member. No subscriber of the memorandum shall take less than one share.
Memorandum of Association defines the relationship of a company with the outsiders. Unsourced material may be challenged and removed. It can be inferred that all the details are included in the clauses. The Company is empowered to pay dividends in specie. In this article we look in detail at the content of these documents.
However, a public company limited by shares can adopt Table A instead of Articles of Association. To procure the recognition of the Company under the laws of any place outside India. They need not be independent or unconnected. The exact address of the registered office is not required at this stage but the same must be notified to the Registrar within thirty days of the incorporation of the company. This article needs additional citations for.
Any director may, by notice executed by the director, appoint any other person including another director to act as their alternate and may terminate the appointment by the same method. Memorandum of Association The Memorandum contains the following statutory clauses: Name clause Clause 1 Scottish Power plc Public Company clause Clause 2 statement that the Company is a public limited company Domicile clause Clause 3 statement that the Companys registered office is to be situated in Scotland Objects clause Clause 4 statement of the objectives and the powers of the Company. Subject to statutory controls, the Articles state that directors may have interests in contracts with the Company. The Memorandum and Articles of Association represent the constitution of the Company and, taken together, they form a statutory contract which binds the Company and its members in terms of section 14 of the Companies Act 1985. In the case of a company having share capital, each subscriber is also required to take at least one share and to write opposite his name the number of shares he agrees to take. The AoA states the powers of the directors of the company, employees of the company and also the powers of the shareholders of the company. A proxy is not entitled to speak at the meeting, but may do so with the consent of the chairman.
The directors may deduct from the dividend payable any amounts outstanding in respect on an unpaid call and may also retain the dividend payable if the Company has exercised its lien over the shares. The alteration of this clause is little bit tedious so it should be decided carefully in the beginning itself. That, however, led to a number of difficulties in the working of the companies. For organisations incorporated before 1st Oct 2009, should they update both their Articles of Association and the Memorandum of Association? That is why every company is required to have its own memorandum and articles. The memorandum shall be printed, divided into consecutively numbered paragraphs, and shall be signed by each subscriber, with his address, description and occupation added, the presence of at least one witness who will attest the same. The capital of the company must be divided into smaller fixed value units which are known as shares. It also has the names of the registrars enrolled.