Getting to Know the Articles of Association
Consider the Articles of Association as the internal rule book that helps control a company’s operations.
These rules spell out the rights, responsibilities, and powers of all individuals involved in the company.
Everything from how board and general meetings are run to the appointment of directors is set in stone in the company’s articles.
While these articles are a must for businesses that are unlimited firms or limited by guarantee, they’re not mandatory for companies limited by shares.
The Articles of Association only applied to Singaporean companies set up before January 3, 2016.
For companies established after that date, a blended document of the Memorandum of Understanding and the Articles of Association (M&AA), now referred to as the Company Constitution, needs to be filed.
The Influence of Articles of Association
These articles essentially act as agreements among company members and between the company and its members, meaning that each member has the personal right to ensure they’re followed.
Remember that these articles are not kept under wraps ᅳ anyone can access them.
Therefore, members of companies that are limited by shares might choose to have a shareholder agreement on top of the articles of association.
A shareholder agreement is a private deal struck among the company’s members.
Using a shareholder agreement can be a clever way to keep some crucial company information away from the public eye since specific facts can be included instead of the articles of association.