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Profession University Unit 10: Articles of Association

Unit 10: Articles of Association Notes

CONTENTS
Objectives
Introduction

10.1 Articles – Registration, Subject Matter and Inspection
10.2 Alteration of Articles
10.3 Effect of Memorandum and Articles/Binding Force of Memorandum and Articles

10.3.1 Members Bound to Company
10.3.2 Company Bound to Members
10.3.3 Members Bound inter se
10.3.4 Whether a Company or Members Bound to Outsiders?
10.3.5 Whether Directors are Bound by whatever is Contained in the Articles?

10.4 Constructive Notice of Articles and Memorandum
10.5 Doctrine of Indoor Management
10.6 Summary

10.7 Keywords
10.8 Review Questions
10.9 Further Reading

Objectives

After studying this unit, you will be able to:

Describe the meaning and purpose of Articles of Association;
Discuss about the alteration of articles;
Explain the doctrine of constructive notice;

Recognize the significance of doctrine of indoor management.
Introduction

The articles of association of a company are its bye laws and regulations, which govern the
management of its internal affairs and the conduct of its business. They define the duties, rights,
powers and authority of the shareholders and the directors in their respective capacities, and of
the company, and the mode and form in which the business of the company is to be carried out.
The articles 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. The articles cannot
supersede the objects as set out in the memorandum of association [Birds Investments Ltd. vs.
C.I.T. (1965) 35 Comp. Cas. 147 Cal.]. The memorandum, lays down the scope and powers of the
company, whereas the articles govern the ways in which the objects of the company are to be
carried out. Also the alteration of memorandum involves elaborate procedure, whereas the

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