What Are Articles of Association?

Articles of Association are internal documents and rules to specify the regulations for a company's operations and define the company's purpose. It outlines how tasks are to be accomplished within the organization, including the process of appointing directors and handling financial records.

What the Articles Include

Articles of Association identify how a company issues shares, pays 澳洲幸运5官方开奖结果体彩网:dividends, audits financial records, and provides 澳洲幸运5官方开奖结果体彩网:voting rights. This set of rules can be considered a user's manual for the company. The content varies from jurisdiction to jurisdiction but this document holds a similar format globally and commonly outlines:

• Company Name: As a legal entity, the company must have a name that can be found in the articles. Usually, a suffix such as "Inc." or "Ltd." must be used to show that the entity is a company. Some words such as "government" or "church" cannot be used or must be used only for specific types of entities.
• Company Purpose: The reason for the company must be stated. Some jurisdictions accept broad purposes like "management," while others require greater detail such as "the operation of a wholesale bakery," for example.
• Share Capital: The 澳洲幸运5官方开奖结果体彩网:number and type of shares that comprise a company's capital are listed in the articles of association. At least one form of 澳洲幸运5官方开奖结果体彩网:common share makes up a company's capital. In addition, there may be several types of 澳洲幸运5官方开奖结果体彩网:preferred shares.
• Legal Organization: The legal organization of the company, including its address, the number of directors and officers, and the identity of the founders and original shareholders, are found in this section.
• Shareholder Meetings: The provisions for the first general meeting of shareholders and the rules that govern subsequent 澳洲幸运5官方开奖结果体彩网:annual shareholder meetings—such as notices, resolutions, and votes—are detailed in this section.

Small Business Example

A person, or group of people, starting a business will typically refer to a lawyer, accountant, or both for advice when setting u♑p a company. The company will choose a name and define its purpose. The company is then registered at the state or𓆏 federal level.

A company may issue shares to divide the company but it doesn't need to. The articles lay out how this can be done. The lawyer or accountant will typically work with the company directors to define how they structure the company.

The articles include the company directors, along with their personal information a🎉nd a business address. Changes can be made to the Articles of Association with director(s) approval.

The Bottom Line

Articles of Association define what a company is and how it operates. This includes fundamental information such as the company's name, its founders and original shareholders, the purpose driving the company, how shareholders meetings are conducted, and how directors are hired.