Articles of the Company otherwise provide

Unless the articles

Notwithstanding anything contained in the articles

Articles of the Company

Articles of a Company
articles so require
No Company unless authorised

ARTICLES OF THE COMPANY

(5) articles means the articles of association of a company as originally framed or as
altered from time to time or applied in pursuance of any previous company law or of this
Act;
5. (1) The articles of a company shall contain the regulations for management of the
company. (2) The articles shall also contain such matters, as may be prescribed:
Provided that nothing prescribed in this sub-section shall be deemed to prevent a
company from including such additional matters in its articles as may be considered
necessary for its management. (3) The articles may contain provisions for entrenchment
to the effect that specified provisions of the articles may be altered only if conditions or
procedures as that are more restrictive than those applicable in the case of a special
resolution, are met or complied with. (4) The provisions for entrenchment referred to in
sub-section (3) shall only be made either on formation of a company, or by an
amendment in the articles agreed to by all the members of the company in the case of a
private company and by a special resolution in the case of a public company. (5) Where
the articles contain provisions for entrenchment, whether made on formation or by
amendment, the company shall give notice to the Registrar of such provisions in such
form and manner as may be prescribed.
(6) The articles of a company shall be in respective forms specified in Tables, F, G, H, I
and J in Schedule I as may be applicable to such company.
(7) A company may adopt all or any of the regulations contained in the model articles
applicable to such company.
(8) In case of any company, which is registered after the commencement of this Act, in
so far as the registered articles of such company do not exclude or modify the
regulations contained in the model articles applicable to such company, those
regulations shall, so far as applicable, be the regulations of that company in the same

manner and to the extent as if they were contained in the duly registered articles of the
company.
(9) Nothing in this section shall apply to the articles of a company registered under
any previous company law unless amended under this Act. Reason for this clause?
The consequences of this clause?
If a Company wants to have a new clause of entrenchment then the Article of such
existing company has to be amended under this 2013 Co Act.
Anything contained contrary in the Article to the Act to that extent its repugnant to the
Act to become Void.
Sec 8 Company ( Not for profit company) can Alter the Articles of the Company only
with the previous approval of the Central Govt.
Sec 10. Articles shall, when registered, bind the company and the members.
Sec 14 - Talks about the Alteration of Article. As per this section the Memorandum can
have conditions for altering the Articles of the company. The company may by special
resolution be able to alter the Articles of the company.
Sec 14 (1) provisio and (2) Alteration of Article for converting the public to private shall
be done only with the approval of the tribunal, the copy of the order of the tribunal has to
be filed in the prescribed form with the Registrar with in 15 days.

Following are the sections that are giving specific powers to the Company that they can
have their own customized provisions without overriding the Act through their Article of
Association.
Sec 2 (54) Managing Director appointment and interested with substantial power that
can be specified in the Articles of a Company. This section enables the company to
state the appointment terms and the substantial powers that its conferring on the
Managing Director. Therefore the company can define the powers of the managing
Director in its articles.

Sec 15 Every alteration of article shall be noted in every copy of the Article and any
violation every officer in default shall be liable to a penalty of Rs.1000 for every copy
issued without such alteration as per sec Sec 15(2).
Sec 17 If a member request a copy of the Article with in seven days of his request the
company has to provide him a copy otherwise the company and every officer of the
company who is in default is held liable for a penalty of one thousand rupees for each
day during which such default continues or one lakh rupees, whichever is less. As per
sec 17(2).
Sec 18(1) Company registered in one clause may convert as another class of company
by altering the clause of the Articles of the company. Meaning the company can have
clauses relating to conversion of company from one clause to another clause of
company, say public to private or LLP etc.,
Sec 43 Kinds of Capital In Explanation (ii) (b) The preference shareholders can have
preferential right to the payment of any fixed premium or premium on any fixed scale,
specified in the memorandum or articles of the company;
Sec 44Nature of shares or Debentures Transferable as per Article
Sec 48(1)(a) Variation of shareholders rights can be done if provision with respect to
such variation is contained in the Article or Memorandum or the terms of the issue not
prohibiting such variation. While drafting the Article a clause has to be ensured to
enable variation of shareholders rights.
Sec 50 Company to accept unpaid share capital, although not called up.
The Articles can include clause to accept unpaid share capital from any member, the
whole or a part of the amount remaining unpaid on any shares held by him, even if no
part of that amount has been called up.
Sec 51. The Article should have clauses to pay dividends in proportion to the amount
paid-up on each share.

Sec 55 (2) A company if it wants to issue preference shares which are liable to be
redeemed within a period not exceeding twenty years from the date of their issue then it
should have a clause authorized to do so.
Sec 58(1) If a private company limited by shares refuses, in pursuance of any power of
the company under its articles shall with in 30 days send a notice of refusal. The Article
can give specific power to its Board to refuse/ restrict the right to transfer.
Sec 61(1) A limited company having a share capital may, if so authorised by its articles,

alter its memorandum to increase it authorised capital consolidate or divide all or any of its
share. There must be a clause authorizing the company to alter its capital. Check ----- any
clause in the table.

Sec : 62(1)(a)(ii) Further issue of share capital. - unless the articles of the company
otherwise provide, a right to renounce can be exercisable by the person concerned to
renounce the shares offered to him. Therefore a company if desired can have a clause
in the article restricting the right to renounce.
Sec 63 (2) (a) - To capitalise its profits or reserves for the purpose of issuing fully paidup bonus shares every company must have a clause authorizing the company to do so.
Sec 68 (2) (a) - To purchase own shares ( Buy back of Shares) or other specified
securities every company must have a clause authorizing the company to do so.
Sec 85 (2)(a) proviso - The register of charges and instrument of charges, shall be open
for inspection during business hours subject to such reasonable restrictions as the
company may, by its articles. The company can impose reasonable restriction within the
provisions for inspecting the register of charges and the instrument of charges.
Sec 97(1) Power of Tribunal to call Annual General Meeting
Sec 98(1) & Sec 98(1)(b) Power of Tribunal to call General Meetings of members of the
company

Sec 103(1) Quorum of the meeting The Articles can provide larger number than the
Act as Quorum
Sec 104 (1) Chairman of the Meeting. The Article can state about the appointment of
Chairman of the meeting if its not mentioned in the Article, the members personally
present at the meeting shall elect one of them to be the Chairman thereof on a show of
hands.
Sec 105 (1) Proxies - provisio - The company which are not having share capital can
also include a clause entitling appointment of Proxies
Sec 106(1) the articles of a company may provide that the member shall not exercise
any voting right in respect of any shares registered in his name on which any calls or
other sums presently payable by him have not been paid, or in regard to which the
company has exercised any right of lien.
Sec 115 its understood from this section that the company in addition to those
resolutions given in the act, through its article can specify additional resolutions that are
required to obtain special notice from the members who intend to pass such resolution.
Sec 119 Inspection of minute-books of general meeting.
The Articles can impose reasonable restrictions, so that, not less than two hours in each
business day are allowed for inspection.
Sec 152 (1) Provisions can be given for Appointment of First Directors in the Articles of
a company
Sec 152 (6) (a) Articles can provide for retirement of all the Directors
Sec 152 (6) (b) Two third retiring Director the remaining Directors can also be
appointed in the Shareholders meeting.
Sec 161 (1) Power to appoint additional director has to be conferred by the Articles of
the Company. If there is no such clause in the Article then its only the shareholders can
appoint the Board of Directors at their meeting.

Sec 161 (2) Power to appoint alternate director can be conferred by the Articles of the
Company. If there is no such clause in the Article then its only the shareholders can
appoint the alternate Directors at their meetings.
Sec 161 (3) Its given as Subject to the articles of the company the Board may appoint
nominee Director, which means that the Article can restrict the power of the Board to
appoint any person as nominee and can mention the terms and conditions of such
appointment.
Sec 161 (4) casual vacancy in case of a public company, if there is no clause
restricting the Board to fill the casual vacancy then the Board can fill such casual
vacancy. Therefore its understood that the article can impose certain restriction on
appointment of casual vacancy by the Board in case of a public company.
Sec 163. Notwithstanding anything contained in this Act, the articles of a company may
provide for the appointment of not less than two-thirds of the total number of the
directors of a company in accordance with the principle of proportional representation.
To opt for appointment of Directors through proportional representation it is must to
have a specific clause in the Article allowing the company to appoint at least tow third of
its Director on proportional representation.
Sec 164 (3) A private company may by its articles provide for any disqualifications for
appointment as a director in addition to those specified in sub-sections (1) and (2) of
sec 164. It enables the private company to have stringent disqualification norms in
addition to the act.
Sec 166 Duties of the Director - director of a company shall act in accordance with the
articles of the company.
Sec 167 (4) A private company may, by its articles, provide any other ground for the
vacation of the office of a director in addition to those specified in sub-section (1) of sec
167. It enables the private company to have additional stringent grounds for vacation of
office of a Director.
Sec 174(4) Quorum of the meeting
Adjournment of meeting for want of Quorum can be made specific that when is the next
meeting etc.,

Sec 176 - Defects in appointment of directors not to invalidate actions takenTermination provision given in the Article
Sec 179 The Board Shall not excise any power that has to be excised by at the General
meeting as given in the Article
Sec 197(4) Overall maximum managerial remuneration and managerial remuneration in
case of absence or inadequacy of profits.
Sec 203(1) Appointment of Key managerial person Provided an individual can not be
appointed as Chairman and MD or CEO at the same time Appointment /
reappointment of Chairman of a company can be given in the Article of the company.
The Articles can say otherwise meaning if the Articles permits an Individual can be
appointed as Chairman and MD / CEO.
Sec 286 (c) Contribution by a Director at the time of winding up of the company can be
provided in the Articles of the company.
Sec 320 Distribution of property at the time of winding up of the company can be
specified in the Article of the company.
A company registered under section 8 not for profit shall not alter the provisions of its
articles except with the previous approval of the Central Government.
Articles shall, when registered, bind the company and the members thereof to the same
extent as if they respectively had been signed by the company and by each member,
and contained covenants on its and his part to observe all the provisions of articles.
A company may, by a special resolution, alter its articles

The company and every officer who is in default shall be liable to a penalty of one
thousand rupees for every copy of the articles issued without such alteration.
A copy of the Articles, on being so requested by a member, has to be sent within seven
days of the request and subject to the payment of such fees as may be prescribed.

Private limited company

In a private company Article must include the following restrictions,
(i) restricts the right to transfer its shares;
(ii) limits the number of its members to two hundred:
(iii) prohibits any invitation to the public to subscribe for any securities of the company;