1. ARTICLES OF ASSOCIATION

2. Meaning of Articles of Association (AOA) :
It contains the rules relating to the management of the Company’s internal affairs.
According to Section 26, of the Indian Companies Act, 2013, Registration of AOA is :
OPTIONAL for – PUBLIC Companies limited by share (if in case it does not have AOA, Table-A will be applicable)
COMPULSORY for – All other Companies
All other companies include : Company limited by guarantee, Unlimited Company, Private Company limited by shares.
Companies limited by share : Companies, whose shareholders are responsible for paying debts up to the amount of their unpaid shares, if the company goes bankrupt.
A company limited by guarantee does not usually have a share capital or shareholders, but instead has members who act as guarantors. The guarantors give an undertaking to contribute a nominal amount (typically very small) in the event of the winding up of the company.

3. Contents of AOA : Different classes of shares and their rights;
Alteration of share capital;
Borrowing power of directors;
Procedure of making an issue of share capital & allotment;
General meetings, Proxies and polls;
Voting rights of members;
Procedure of issuing Share Certificates & Warrants;
Payment of dividend & creation of reserves;
Forfeiture of shares & their re-issue;
Appointment, Powers, Duties, Qualification, & Remuneration of Directors;
Procedure for transfer & transmission of shares;
Time lag in between Calls on shares;
Use of the common seal of the company;
Conversion of shares into stock;
Keeping books of accounts and their audit;
Lien of shares;
Payment of commission on shares & debentures to underwriters;
Capitalisation of Profits;
Arbitration Provision;
Rules for adoption for preliminary contract;
Rules as to resolution.
Re organization & consolidation of shares;
For example, "stock" is a general term used to describe the ownership certificates of any company, in general, and "shares" refers to a the ownership certificates of a particular company. So, if investors say they own stocks, they are generally referring to their overall ownership in one or more companies.
Lien of shares : A lien is the right to retain possession of a thing until a claim is satisfied. In the case of a company lien on a share means that the member would not be permitted to transfer his shares unless he pays his debt to the company.

4. Difference between Memorandum & Articles of Association :
MOA
AOA
Conditions upon which the company is incorporated;
Internal regulations of the company;
It is subordinate to the Act only;
It is subordinate to the Act as well as Memorandum;
It is to be filled by all types of companies;
Public companies limited by share need not file;
Can no be easily altered;
Can be easily altered;
Defines relation between Company & Outsiders i.e Creditors, Buyers etc
Governs the internal relationship between Company & Members

5. ALTERATION OF ARTICLES :
Being the internal regulations, the company can alter it by passing a Special Resolution only, according to Section 31.
A copy must be filed with the Registrar within 30 days of passing the said resolution.
A copy of Altered Articles must also be filled with Registrar within 3 months of passing the Resolution.
LIMITATIONS :
The Alteration must not be inconsistent with :
- The provisions of the Companies Act,
- The conditions contained in the Memorandum,
- Alteration ordered by the Company Law Board,
Must not deprive any person of his right under a contract;
Must not constitute a fraud on the minority;
Must be bonafide for the benefit of the company as a whole;
Central Government approval has to be obtained in certain cases
- Conversion of Public Co. Into Private Company;
- Appointment or Re-appointment of Directors;
- Increase in remuneration of a Director.

6. BINDING FORCE OF ARTICLES OF ASSOCIATION :1
Company to Member 2
Member to Company 3
Member to Member 4
No boundation to outsiders
* Member to Member : Members are not bound to each other by default.
Any member is not allowed to sue another member for any wrong done by the latter to the company.
Exception : when the person against whom relief is sought controls the majority of the shares.
* Articles do not create any contract with any person/entity external to the Organization.

7. DOCTRINE OF CONSTRUCTIVE NOTICE :
After registration, AOA becomes “Public Document”.
The legal effect of this doctrine is that if a person deals with a company in a manner inconsistent with the provisions of AOA, he is deemed to have dealt with the company at his own risk.
A person is expected to inspect the basic public document of the company (memorandum & articles) available at Registrar of Companies Office, before entering in any transaction.

8. DOCTRINE OF INDOOR MANAGEMENT :
It is an exception to Doctrine of Constructive Notice;
It offers protection to the outsider dealing with the company;
Doctrine has been applied to make companies liable in case where deals were made by the directors :
Whose appointment was defective;
Who were appointed properly but were yet to be delegated necessary authorities;
Who had not yet been appointed as Director;
Who have been delegated authority in a meeting which had lacked quorum.

9. EXCEPTIONS TO THE DOCTRINE OF INDOOR MANAGEMENT :
Though the doctrine provides outsiders, protection while dealing with registered companies, court did not find it proper to apply the doctrine in following cases and protection was denied :
Knowledge of irregularity;
Sufficient ground for suspicion;
Acts outside apparent authority;
Acts ultra vires the Company.
* Ultra Vires = Beyond one’s legal power or authority.