Objectives of the Articles of Association

Objectives of the Articles of Association

Objectives of the Articles of Association

The document that contains all rules and regulations regarding daily activities and internal management of the company is called Articles of Association. It is a document that contains the purpose of the company as well as the duties and responsibilities of its members defined and recorded clearly.

The objectives of Articles of Association are to determine how to achieve the objectives which are explained in the Memorandum of Association of the Company. Generally, an Article of Association is adopted for the following purposes:

  • To operate the daily activity of the company properly.
  • To explain the rules & regulations regarding company’s internal functions.
  • To distribute the company’s capital on the basis of the classification of the company’s shares.
  • To describe and explain the sections and clauses of the Memorandum of Association.
  • To determine and explain the power, duty, responsibility, right and mutual relationship of the directors.
  • To determine the recruitment, salary, financial and non-financial benefits of the executives.
  • To integrate the rules regarding meetings of the company.
  • To reserve the security of the company’s seal or logo.
  • To explain and estimate the dividend policy of the company.
  • To explain the method of the dissolution of the company etc.

From the above discussion, we can say that an article of association is the essential document of the Joint Stock Company regarding its management, capital, structure and all operations of the company.

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