Business Law: Certificate Level

Institute of Chartered Accountants of Bangladesh(ICAB)
Business Law-Certificate Level
Overview of Companies Act, 1994

Articles of Association
Meaning of AOA:
The Articles of Association or AOA are the legal document that along with the
memorandum of association serves as the constitution of the company. The Articles of
Association is a document which contains-
 rules;
 regulations and bye-laws regarding the internal management of the company;
 Power of shareholders and members
Articles of Association must not violate any provision of MOA and Companies Act.
Contents of Articles of Association
Articles of Association usually contain provisions in respect of the following matters:
a. Share capital, rights of shareholders, share certificates.
b. Lien on shares.
c. Calls on shares.
d. Transfer of shares.
e. Transmission of shares.
f. Forfeiture of shares.
g. Conversion of shares into stock.
h. Share warrants.
i. Alteration of capital.
j. General meetings and voting rights of members.
k. Appointment and remuneration of directors, board of directors, managers and secretary.
l. Dividends and reserves.
m. Accounts and audits.
n. Capitalization of profits.
o. Winding up
Memorandum Vs Articles of Association
Subject Memorandum of Association Article of Association
Definition A document that contains all the condition A document that contains the rules and
which are required for the registration as a regulation for the administration of the
company. company.
Source/Reff. defined in section 2 (56) defined in section 2 (5)
Registration Must be registered at the time of May or May not be registered.

incorporation
Types of Powers & objects of the company Internal rules & regulations of the
information company
Status Sub-ordinate to the company Act Sub-ordinate to the memorandum
Contents Must contain 6 clauses Can be drafted according to company

decision
Relation Between company & Outsiders Between company & members

Forms and contents of memorandum of various companies
In the case of a company limited by shares (Section 6)
(a) the memorandum shall state:
(i) the name of the company, with "limited" as the last word in its name;
(ii) The address of the registered office;
(iii) the objects of the company,
(iv) the liability of the members is limited;
(v) the amount of share capital;
In the case of a company limited by guarantee (Section 7)

(b) the memorandum shall state:
(i) the name of the company, with "limited" as the last word in its name.
(ii) the address of the registered office;
(iii) the objects of the company,
iv) that the liability of the members is limited;
Continued….
Forms and contents of memorandum of various companies
For unlimited company (Section 8)
1. The name of the company;

2. The address of the registered office of the company;
3. The objects of the company;
lf the company has a share capital, then each subscriber of the memorandum shall take at
least one share; and each subscriber shall write opposite to his name the number of shares he
takes.
Alteration of memorandum
The memorandum of Association of a company can be altered as per Co. Act, 1994 by
special resolution for the following purposes:
a) to carry on its business more economically or more efficiently; or

b) to attain its main purpose by new or improved means; or
c) to enlarge or change the local area of its operations; or
e) to restrict or abandon any of the objects specified in the memorandum; or
f) to sell or dispose of the whore or any part of the undertaking of the company; or
g) to amalgamate with any other company or body of persons.
Interactive Questions 2 & 3
2. What do you understand by certificate of incorporation of a company? Discuss the

conclusiveness of certificate of incorporation.
3. XYZ company Limited is a Private Limited company having five shareholders. The
Board of directors of company is constituted of two directors. XYZ company Limited
wants to increase its paid-up capital to Tk. 200 million from existing paid up capital of
Tk. 100 million. The Board of Directors of the company issuance of right shares for the
purpose of raising the paid up share capital.
Describe the procedure to be followed for converting XYZ company Limited in to Public
Limited Company.
Answer of Interactive Questions 2
2. Meaning of AOA:
A certificate of incorporation is a legal document/license relating to the formation of a
company or corporation. It is a license to form a corporation issued by Register of RJSC.
Conclusiveness:
A certificate of incorporation given by the register in respect of any association shall be
conclusive evidence that all the requirements of this Act in respect of registration and of
matters precedent and incidental thereto have been complied with, and that the association
is a company authorized to be registered and duly registered under this Act.
Answer of Interactive Questions 3
For converting XYZ company Limited into a Public Limited the procedures are as
follows:
 Increasing shareholder: XYZ Company Limited has five shareholders the number of
shareholders must be increased to at least seven by issuing new or transferring shares.
 Approval of BOD: Decision needs to be made by the Board of Directors.
 EGM: Shall be called the EGM for the purpose of getting approval of the shareholders.
 Alteration and amendment of Article of Association and submitted to RJSC.
 Required fee shall be deposited to RJSC.
 Approval by register

Business Law: Certificate Level

Uploaded by

Copyright:

Available Formats

Business Law: Certificate Level

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Business Law: Certificate Level

Uploaded by

Copyright:

Available Formats

Institute of Chartered Accountants of Bangladesh(ICAB)

Business Law-Certificate Level

Overview of Companies Act, 1994

Source/Reff. defined in section 2 (56) defined in section 2 (5)

Registration Must be registered at the time of May or May not be registered.

Contents Must contain 6 clauses Can be drafted according to company

Relation Between company & Outsiders Between company & members

In the case of a company limited by guarantee (Section 7)

For unlimited company (Section 8)

1. The name of the company;

a) to carry on its business more economically or more efficiently; or

2. What do you understand by certificate of incorporation of a company? Discuss the

You might also like