Articles of Association (AOA)



Articles of Association (AOA)

The **Articles of Association (AOA)** of a company lay down the internal rules and regulations governing the management and administration of the company. These articles are crucial because they detail how the company will be run, the rights and duties of its members, and how decisions are made.

When a company decides to amend its AOA, the amendment typically covers one or more of the following areas:

(i)*Shareholder Rights and Obligations**: - Changes in the rights of shareholders, such as voting rights, dividend distribution, or share transfer procedures, can be amended.

(ii). Director's Powers and Duties**: - The AOA may define the roles, powers, appointment process, and responsibilities of directors. Amendments here could involve changes to the powers of directors or the procedure for appointing/removing directors.

(iii).*Decision-Making Processes**: - This includes the rules for conducting meetings (AGMs, board meetings, etc.), quorum requirements, and voting procedures.

(iv). Dividend Policy**: - The AOA may specify how and when dividends will be paid to shareholders. Any changes in the dividend distribution process would require an amendment.

(iv)**Share Capital and Shareholder Meetings**: - Any changes to share classes, issuance of new shares, rights of shareholders, or rules around shareholder meetings can be amended.

(iii).**Company's Management Structure**: - Modifications can include the appointment and removal of managers, officers, or other key personnel in the company.

(iv). **Indemnification and Liability Clauses**: - Any change in terms regarding indemnification of directors, officers, or shareholders can be included.

(iv)Amendment Process: - **Board Resolution**: To amend the AOA, the company usually passes a board resolution. However, the proposed amendments must be approved by a special resolution in a general meeting of the shareholders.