Definition of 'Articles Of Association'

Definition of 'Articles Of Association'A document that specifies the regulations for a company's operations. The articles of association define the company's purpose and lays out how tasks are to be accomplished within the organization, including the process for appointing directors and how financial records will be handled.Investopedia explains 'Articles Of Association'Articles of association often identify the manner in which a company will issue stock shares, pay dividends and audit financial records and power of voting rights. This set of rules can be considered a user's manual for the company because they outline the methodology for accomplishing the day-to-day tasks that must be completed.

In corporate governance, a company's articles of association (called articles of incorporation in some jurisdictions) is a document which, along with the memorandum of association (in cases where the memorandum exists) form the company's constitution, defines the responsibilities of the directors, the kind of business to be undertaken, and the means by which the shareholders exert control over the board of directors.

Articles subscribed by the members of a joint-stock company or corporation organized under a general law, and which create the corporate union between them. Such articles are in the nature of a partnership agreement, and commonly specify the form of organization, amount of capital, kind of business to be pursued, location of the company, etc. Articles of association are to be distinguished from a charter. in that the latter is a grant of power from the sovereign or the legislature.

Law Dictionary: http://thelawdictionary.org/articles-ofassociation/#ixzz2cbInJ6CN

Content of articles of association. 379.520. Whenever any such corporation desires to avail itself of the provisions of sections 379.515 to 379.580 and to reorganize and extend and continue its corporate existence under the general laws of this state after the time limited by law or its charter for the termination of its corporate existence, the directors thereof shall within one year prior to such time draw up and submit to its stockholders, if it be a stock company, or to its policyholders if it be a mutual company, or to its stockholders and its policyholders in its mutual department if it be a stock and mutual company, articles of association, which shall set forth (1) The name of the company; (2) The place where the principal office for the transaction of business shall be located; (3) The specific kinds of business it proposes to transact; (4) The period of time for which its corporate existence shall be extended and continued; (5) The manner in which the corporate powers granted under the general insurance statutes shall be exercised, showing the number of directors, which shall not be more than twenty-five nor less than nine, and such other particulars as may be necessary to make manifest the objects and purposes of the corporation; provided, however, that the name of the corporation shall not be changed, nor shall the objects or plan of business embrace any other or more than under the general insurance statutes of this state can be carried on by any one corporation. (RSMo 1939 5991)

Another272.131Articles of association, contents -- Filing effect.(1) The articles of incorporation of each association shall state:(a) The name of the association that satisfies KRS 14A.3-010;(b) The purposes for which it is formed;(c) The place where its principal business will be transacted;(d) The period of duration, which may be perpetual. When the articles ofincorporation fail to state the period of duration, it shall be consideredperpetual. Any association heretofore or hereafter organized for a periodless than perpetual, may, by amendment to its articles of incorporation,extend the period of its duration for a specified period or perpetually;(e) The names and addresses, not less than five (5), of those who are toserve as directors for the first term or until the election of their successors;(f) If organized without capital stock, whether the property rights and interestof each member shall be equal or unequal; and if unequal, the articlesshall set forth the general rules applicable to all members by which theproperty rights and interests, respectively, of each member shall bedetermined and fixed; and the association shall have the power to admitnew members who shall be entitled to share in the property of theassociation with the old members in accordance with the general rules.These provisions of the articles of incorporation shall not be altered,amended, or repealed except by the affirmative vote of not less thantwo-thirds (2/3) of the votes entitled to be cast by members present inperson, or by proxy, if permitted by the bylaws, and voting thereon at anyregular or special meeting; and(g) If organized with capital stock, the authorized amount of the stock and thenumber of shares into which it is divided and the par value thereof.Capital stock may be divided into preferred and common stock. Thearticles of incorporation must contain a statement of the number of sharesof stock to which preference is granted and the number of shares of stockto which no preference is granted and the nature and extent of thepreference and the privileges granted to each. No specific amount of thecapital stock authorized is required to be subscribed before theassociation may transact business with other than its members; the boardmay determine the amount of capital stock to be issued as the businessof the association may justify or demand, from time to time, within theamount of the total authorization.(2) The articles of incorporation may contain any provision consistent with law withrespect to management, regulation, government, financing, indebtedness,membership, the establishment of voting districts and the election of delegatesfor representative purposes, the issuance, retirement and transfer of its stock, ifformed with capital stock, or any provisions relative to the way or manner inwhich it shall operate with respect to its members, officers, or directors, andany other provisions relating to its affairs; but nothing set forth in this sectionshall be construed as limiting any of the rights or powers otherwise given tosuch associations.(3) The articles of incorporation must be subscribed by the incorporators andacknowledged by one (1) of them before an officer authorized by the laws ofthis state to take and certify acknowledgments of deeds and conveyances; andshall be filed and recorded in accordance with the statute relating tocorporations generally; and when so filed, the articles of incorporation, orcertified copies thereof, shall be received in all the courts of this state, andother places, as prima facie evidence of the facts contained therein, and of thedue incorporation of the association. A copy of the articles of incorporation,indorsed by the Secretary of State with the fact and time of recording in hisoffice, shall be filed with the dean of the College of Agriculture of the Universityof Kentucky and with the Commissioner of the Department of Agriculture.Effective:January 1, 2011History: Repealed and reenacted 2010 Ky. Acts ch.51, sec.77, effective July 15,2010; and repealed, reenacted, and amended ch.151, sec.57, effectiveJanuary 1, 2011. -- Amended 2007 Ky. Acts ch.137, sec.77, effective June 26,2007. -- Amended 1984 Ky. Acts ch.111, sec.117, effective July 13, 1984. --Created 1966 Ky. Acts ch.208, sec.5.Legislative Research Commission Note (1/1/2011).This section was repealed,reenacted, and amended by 2010 Ky. Acts ch.151, and repealed and reenactedby 2010 Ky. Acts ch.51. Pursuant to Section 184 of Acts ch.51, it was the intentof the General Assembly that the repeal and reenactment not serve to void theamendment, and these Acts do not appear to be in conflict, therefore, they havebeen codified together.Legislative Research Commission Note (7/15/2010).2010 Ky. Acts ch.51,sec.183, provides, "The specific textual provisions of Sections 1 to 178 of thisAct which reflect amendments made to those sections by 2007 Ky. Acts ch.137shall be deemed effective as of June 26, 2007, and those provisions are herebymade expressly retroactive to that date, with the remainder of the text of thosesections being unaffected by the provisions of this section."

Difference between Memorandum and articles of Association

1. Memorandum of association is the charter of the company and defines the scope of its activities. Articles of association of the company is a document which regulates the internal management of the company. These are the rules made by the company for carrying out the objects of the company as set out in the memorandum.2. Memorandum of association defines the relation of the company with the rights of the members of the company interest and also establishes the relationship of the company with the members.3. Memorandum of association cannot be altered except in the manner and to the extent provided by the act, whereas the articles being only the byelaws of the company can be altered by a special resolution.4. Memorandum is a supreme document of the company whereas articles are subordinate to the memorandum. They cannot alter or control the memorandum.5. Every company must have its own memorandum. But a company limited by shares need not register its articles. In such a case table A applies.6. A company cannot depart from the provisions contained in its memorandum, and if it does, it would be ultra-vires the company. Anything done against the provisions of articles, but which is intra-vires the memorandum, can be ratified.