Page 81 - DCOM106_COMPANY_LAW

Company Law

Notes 6.3 Subject Matter of Articles

The articles of a company usually deal with the following matters:
1. The business of the company;

2. The amount of capital issued and the classes of shares into which the capital is divided; the
increase and reduction of share capital;
3. The rights of each class of shareholders and the procedure for variation of their rights;

4. The execution or adoption of a preliminary agreement, if any;
5. The allotment of shares; calls and forfeiture of shares for non-payment of calls;
6. Transfer and transmission of shares;
7. Company’s lien on shares;
8. Exercise of borrowing powers including issue of debentures;

9. General meetings, notices, quorum, proxy, poll, voting, resolution, minutes;
10. Number, appointment and powers of directors;
11. Dividends – interim and final – and general reserves;

12. Accounts and audit;
13. Keeping of books – both statutory and others.

Self Assessment

Fill in the blanks:
1. The articles of association of a company limited by shares may adopt all or any of the
regulations contained in Table A in ............................
2. The .......................... of a company have a contractual force between company and its members
as also between the members inter se in relation to their rights as such members.

3. Articles cannot supersede the objects as set out in the .............................
4. ............................. states that a public company limited by shares may register articles of
association signed by the subscribers to the memorandum.

6.4 Inspection of Copies of the Articles

A company shall, on being so required by a member, send to him within seven days of the
requirement, on payment of one rupee, a copy of the articles. If a company makes default, the
company and every officer of the company, who is in default, shall be punishable with fine up
to 50 (s.39).

Task A company, in which the directors hold majority of the shares, altered its articles so
as to give power to directors to require any shareholder, who competed with the company’s
business, to transfer his shares, at their full value, to any nominee of the directors. S had
some shares in the company. Is S bound by the alteration? [Hint: S shall be bound by the
alteration. The alternation is in the general interest of the company.]

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