Articles of Association

The Articles of Association (AOA) are the internal rule-book of the company. Where the Memorandum of Association defines what the company may do and how it relates to the outside world, the Articles lay down how the company is to be run day-to-day and govern the relationship between the company and its own members, and among the members themselves.

The Articles of Association typically deal with matters such as:

• The rights, duties, and manner of issue and transfer of shares.
• The procedure for calls on shares and forfeiture of shares for non-payment.
• The appointment, powers, duties, and remuneration of directors.
• The procedure for convening and conducting general meetings and board meetings, and voting rights of members.
• The rules for declaration and payment of dividends.
• The keeping of accounts, audit, and the use of the common seal (where the company chooses to use one).
• The procedure to be followed in winding up the company.

Because the Articles govern only the company's own internal management, they are subordinate both to the Companies Act, 2013 and to the company's own Memorandum of Association: any article that conflicts with the Memorandum, or with the mandatory provisions of the Act, is invalid to the extent of that conflict. Unlike the Memorandum, which fixes the outer limits of the company's powers and is comparatively difficult to change, the Articles can usually be altered more easily by the members passing a special resolution, allowing the company some flexibility to update its internal rules as circumstances change.

Memorandum of Association vs. Articles of Association — at a glance