THE COMPANIES ACT, 1956
COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
[NAME OF COMPANY]
CONSTITUTION OF THE COMPANY
1. Subject to the regulations hereinafter provided, the regulations contained in Table „A‟ in
the First Schedule to the Companies Act, 1956 shall apply to the Company.
2. The regulations for the management of the Company and for the observance by the
members thereof shall be such as are contained in these Articles subject, however to the
exercise of the statutory powers of the Company in respect of repeal, additions,
alterations, substitutions, modifications and variations thereto by a Special Resolution as
prescribed by the Companies Act, 1956 or any statutory modification thereof in force.
3. Subject to Article 2 hereunder, unless repugnant to the context, the words and
expressions contained in these Articles shall bear the same meaning as in the
Companies Act, 1956 or any statutory modification thereof in force.
4. In these regulations –
(a) “the Act” means the Companies Act, 1956;
(b) “the Company” or “this Company” means [NAME OF THE COMPANY]
(c) “the seal” means common seal of the Company.
(d) "these Articles" or "these Presents" means the regulations contained in this
Articles of Association
(e) “Month" means a calendar month reckoned according to the British Calendar.
(f) "the Office" means the Registered office for the time being of the Company
(g) „Paid up‟ includes credited as paid up.
(h) Person includes corporations as well as individuals.
(i) Words imputing the masculine gender shall also include feminine gender.
(j) Words imputing the singular number includes plural where the context so
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(k) „Auditor‟ mean the statutory auditors of the Company appointed by the
Company in accordance with the provisions of the Act.
(l) "Beneficial Owner" means a person whose name is recorded as such with a
(m) "Depository" means a company formed and registered under the Companies
Act, 1956 (1 of 1956), and which has been granted a certificate of registration
under sub-section (1A) of section 12 of the Securities and Exchange Board of
India Act, 1992 (15 of 1992);
5. This Company being a private limited company within the meaning of Sections 2(35) and
3 (1)(iii) of the Companies Act 1956 and accordingly the following provisions shall have
effect, namely: -
a) No invitation shall be issued to the public to subscribe for any shares in or debentures
of the Company;
b) The number of the members of the Company (Exclusive of persons who are in the
employment of the Company and persons who, having been formerly in the
employment of the Company, were members of the Company while in that
employment and have continued to be members after the employment ceased) is
limited to fifty; provided that where two or more persons hold one or more shares in
the Company jointly, they shall, for the purpose of this definition, be treated as a
c) The right to transfer the shares in the Company is restricted in the manner and to the
extent provided in these Articles.
d) Any Invitation or acceptance of deposits from persons other than the company‟s
members, directors or their relatives is prohibitive.
6. Wherever in the Act it has been provided that the Company shall have any right, privilege
or authority or that the Company could carry out any transaction only if the Company is
so authorized by its Articles, then and in that case and for that purpose, by virtue of this
Regulation, the Company is hereby specifically authorized, empowered and entitled to
have such right, privilege or authority, to carry out such transactions as have been
permitted by the Act, without there being any separate Regulation in that behalf herein
7. The authorized share capital of the Company shall be such as specified in the Clause V
of Memorandum of Association or as altered from time to time, payable in the manner as
may be determined by the directors, with power to increase, reduce, sub divide or to
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repay the same or to divide the same into several classes and to attach thereto any rights
and to consolidate or sub divide or re-organize the shares and subject to the provisions of
Act, to vary such rights as may be determined in accordance with the regulations of the
company. The company shall have minimum paid up capital of Rs. 1, 00,000.
INCREASE IN SHARE CAPITAL
8. The Company may, from time to time, by ordinary resolution increase the share capital by
such sum, to be divided into shares of such amount, as may be specified in the
9. The Company may, by ordinary resolution, –
1. Consolidate and divide all or any of its share capital into shares of larger amount
than its existing shares;
2. Sub-divide its existing shares or any of them into shares of smaller amount than
is fixed by the memorandum, subject, nevertheless, to the provisions of clause
(d) of sub-section (1) of section 94 of the Act;
3. Cancel any shares which, at the date of the passing of the resolution, have not
been taken or agreed to be taken by any person.
DECREASE IN SHARE CAPITAL
10. The company may, subject to any incidental authorization and consent required by law,
from time to time, by special resolution reduce in any manner :-l
1. Its share capital;
2. Any capital redemption reserve account; or
3. Any securities premium account.
REEDEMABLE PERFERENCE SHARES
11. Subject to the provisions of Section 80 of the Act, any preference shares may, with the
sanction of an ordinary resolution, be issued on the terms that they are, or at the option of
the Company are liable, to be redeemed on such terms and in such manner as the
Company before the issue of the shares may determine.
12. Subject to the provisions of the Act, it shall be lawful for the Company to issue at a
discount, shares of a class already issued.
ALTERATION OF THE RIGHTS OF SHAREHOLDERS
13. If at any time the share capital is divided into different classes of shares, the rights attached to
any class (unless otherwise provided by the terms of issue of the shares of that class) may,
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subject to the provisions of sections 106 and 107 of the Act, and whether or not the Company is
being wound up, be varied with the consent in writing of the holders of three-fourths of the
issued shares of that class, or with the sanction of a special resolution passed at the separate
meeting of the holders of the shares of that class.
To every such separate meeting, the provisions of these regulations relating to general
meetings shall mutatis mutandis apply. The necessary quorum for such meetings shall be two
persons at least holding or representing by proxy one-third of the issued shares of the class in
14. The rights conferred upon the holders of the shares of any class issued with preferred or
other rights shall not, unless otherwise expressly provided by the terms of issue of the
shares of that class, be deemed to be varied by the creation or issue of further shares
ranking pari passu therewith.
ISSUE OF SHARE WITH DIFFERENTIAL VOTING RIGHT
15. In terms of Section 86 of the Act , a company can now issue equity shares with
differential rights to voting, dividend or otherwise in accordance with the Companies
(Issue Of Shares With Differential Voting Rights) Rules 2001. The company can now
issue equity shares which may carry different rights of voting or dividend or both
16. The Company may exercise the powers of paying commissions conferred by section 76
of the Act, provided that the rate or the amount of the commission paid or agreed to be
paid shall be disclosed in the manner required by that section.
(1) The commission may be by way of payment of cash or through the allotment of
fully or partly paid shares or partly in the one way and partly in the other.
(2) The Company may also, on any issue of shares, pay such brokerage as may be
17. The commission paid or agreed to be paid shall not exceed in case of shares, five
percent of the price at which the shares are issued or the amount or rate authorized
by the articles, whichever is less.
18. The company by its Article may restrict its right to re-issue the debenture either by re-
issuing the same debenture or by issuing other debenture in their place.
TRUSTS NOT RECOGNISED
19. Except as required by the law, no person shall be recognized by the Company as
holding any share upon any trust, and the Company shall not be bound by, or be
compelled in any way to recognize (even when having notice thereof) any equitable,
contingent, future or partial interest in any share, or any interest in any fractional part
of share, or (except only as by these regulations or by law otherwise provided) any
other rights in respect of any share except an absolute right of the entirety thereof in
the registered holder
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20. (1) Every person whose name is entered as a member in the register of members
shall be entitled to receive within three months after allotment or within two months
after the application for the registration of transfer (or within such other period as the
conditions of issue shall provide) –
1. One certificate for all his shares without payment; or
2. Several certificates, each for one or more of his shares, upon payment of one
rupee for every certificate after the first.
(2) Every certificate shall be under the seal and shall specify the shares to which it
relates and the amount paid up thereon.
21. (1) The Company shall register not less than two persons as joint holders of
(2) In respect of any share or shares held jointly by several persons, the
Company shall not be bound to issue more than one certificate, and delivery
of a certificate for a share to one of several joint holders shall be sufficient
delivery to all such holders.
22. (1) The joint holders of a share shall jointly and severally be liable to pay all
calls in respect thereof.
(2) Any dividend, interest or other moneys payable in cash in respect of shares
may be paid to the order of the Registered holder or to his bankers by any
mode, or by Cheque or warrant sent through the post directed to the
registered address of the holder or, in the case of joint holders, to the
registered address of that one of the joint holders who is first named in the
register of members, or to such person and to such address as the holder or
joint holders, may, in writing direct.
(3) Any one of two or more joint holders of shares may give effectual receipts for
any dividend, bonus or any other sum payable in respect of such share.
LOSS OR DESTRUCTION OF SHARE CERTIFICATE
23. If a share certificate is defaced, lost or destroyed, it may be renewed on payment of
such fee, if any, not exceeding rupees ten and subject to such terms, if any, as to
evidence and indemnity and the payment of out-of-pocket expenses incurred by the
Company in investigating evidence, as the directors think fit. In case a duplicate
share certificate is issued, the word "Duplicate" shall be stamped or punched in bold
letters across the face thereof.
24. No fee shall be charged for sub-division and consolidation of share and debenture
certificates and for sub-division of letters of allotment and split, consolidation, renewal
and pucca transfer receipts into denominations corresponding to the market units of
trading, for sub-division of renounceable letters of rights, for issue of new certificate in
replacement of those which are old, decrepit or worn out, or where the cages on the
reverse for recording transfers have been fully utilized. Provided that the Company
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may charge such fees as may be agreed by it with the Stock Exchange with which its
shares may be listed for the time being for issue of new certificates in replacement of
those that are torn, defaced, lost or destroyed and for sub-division and consolidation
of share and debenture certificates and for sub-division of letter of allotment and split,
consolidation, renewal and pucca transfer receipts into denominations other than
those fixed for the market units of trading,. However, the Company shall not sub-
divide/consolidate a share certificate comprising of shares other than the marketable
25. The Board shall have full power-
1. To make such provision, by the issue of fractional certificates or by payment in
cash or otherwise as it thinks fit, for the case of shares or debentures becoming
distributable in fractions; and also
2. To authorize any person to enter, on behalf of all the members entitled thereto,
into an agreement with the Company providing for allotment to them respectively,
credited as fully paid up, of any further shares to which they may be entitled upon
such capitalization, or (as the case may require) for the payment by the
Company on their behalf, by the application thereto of their respective
proportions of the profits resolved to be capitalized, of the amounts or any part of
the amounts remaining unpaid on their existing shares.
LIEN ON SHARES
26. The Company shall have a first and paramount lien -
1. On every share (not being a fully-paid share), for all moneys (whether presently
payable or not) called, or payable at a fixed time, in respect of that share; and
2. On all shares (not being fully-paid shares) standing registered in the name of a
single person, for all moneys presently payable by him or his estate to the
Provided that the Board of Directors may at any time declare any share to be wholly
or in part exempt from the provisions of this clause
27. The Company‟s lien, if any, on a share shall extend to all dividends payable thereon.
SALE OF SHARES ON WHICH COMPANY HAS LIEN
28. The Company may sell, in such manner as the Board thinks fit, any shares on which
the Company has a lien:
Provided that no such sale shall be made –
1. Unless a sum in respect of which the lien exists is presently payable, or
2. Until the expiration of fourteen days after a notice in writing stating and
demanding payment of such part of the amount in respect of which the lien exists
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as is presently payable, has been given to the registered holder for the time
being of the share or the person entitled thereto by reason of his death or
29. (1) To give effect to any such sale, the Board may authorize any person to transfer
the shares sold to the purchaser thereof.
(2) The purchaser shall be registered as the holder of the shares comprised in any
(3) The purchaser shall not be bound to see to the application of the purchase
money, nor shall his title to the shares be affected by any irregularity or invalidity
in the proceedings in reference to the sale.
30. The proceeds of the sale shall be received by the Company and applied in payment of
such part of the amount in respect of which the lien exists as is presently payable, the
residue, if any, shall, subject to a like lien for sums not presently payable as existed
upon the shares before the sale, be paid to the person entitled to the shares at the
date of the sale.
CALLS ON SHARES
(1) The Board may, from time to time, make calls upon the members in respect of
any moneys unpaid on their shares (whether on account of the nominal value of
the shares or by way of premium) and not by the conditions of allotment thereof
made payable at fixed time
(2) A call shall be deemed to have been made at the time when the resolution of
the Board authorizing the call was passed and may be required to be paid by
(3) Any sum which by the terms of issue of a share becomes payable on allotment or
at any fixed date, whether on account of the nominal value of the share or by way
of premium, shall, for the purposes of these regulations, be deemed to be a call
duly made and payable on the date on which by the terms of issue such sum
(4) Not less than 30(Thirty) days notice of any call shall be given to the members
specifying the time and place of payment and to whom such call shall be paid.
(5) A call may be revoked or postponed at the discretion of the Board.
32. (1) If a sum called in respect of a share is not paid before or on the day appointed for
payment thereof, the person from whom the sum is due shall pay interest thereon
from the day appointed for payment thereof to the time of actual payment at a rate,
as the Board may determine but in any case not exceeding 12%.
(2) The Board shall be at liberty to waive payment of any such interest wholly or in
33. Upon all or any of the moneys so advanced, may (until the same would, but for such
advance, become presently payable) pay interest at such rate, as may be decided by
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TRANSFER OF SHARES
34. (1) The instrument of transfer of any share in the Company shall be executed by or
on behalf of both the transferor and the transferee.
(2) The transferor shall be deemed to remain a holder of the share until the name of
the transferee is entered in the register of members in respect thereof.
35. Subject to the provisions of section 108 of the Act, the shares in the Company shall
be transferred through the Prescribed Form under Companies (Central Govt.‟s)
General Rules & Forms, 1956, unless the shares are in dematerialized form.
(1) The Shares of the Company may be transferred by any Member to another
Member of the Company. However, shares of the Company shall not be
transferred to a person who is not its Member at the time of such transfer, so
long as any Member or any person selected by the Directors in the interest of the
Company, is willing to purchase the shares at a fair value.
(2) Except where the transfer is made pursuant to Article 36 (1), hereof, every
Member or other person who intends to transfer the shares (herein after referred
to as the “Vendor”) shall give in writing (herein after referred to as the “Transfer
Notice”) to the Company that he desires to transfer the same. Such notice should
constitute the Board his agent for the sale of the said Shares in one or more lots
at the discretion of the Board to Members of the Company. The transfer notice
shall not be revocable except with the sanction of the Board.
(3) The fair price shall be that price as may be agreed upon by the Vendor and the
Board, or in default of such agreement at a price which the Auditor of the
Company for the time being shall certify by writing under his hand to be in his
opinion the fair selling value thereof as between a willing vendor and a willing
(4) Upon the price being ascertained as aforesaid the Board shall forthwith give
notice to all the Members of the Company of the number and price of the Shares
to be sold and invite each of them to state in writing within twenty one (21) days
from the date of notice whether he is willing to purchase any, and if so, what
maximum number, of the said Shares.
(5) At the expiration of the said twenty one (21) days, the Board may allocate the
said Shares to or amongst the Member or Members who shall have expressed
his or their willingness to purchase in proportion to the number of Shares already
held by them respectively, provided that no Member shall be obliged to take
more than the said maximum number of Shares so notified by him. Upon such
allocation being made the Vendor shall be bound on payment of the said price to
transfer the Shares to the purchaser or purchasers thereof and if he defaults in
doing so, the Board may receive and give a good discharge for the purchase
money on behalf of the Vendor and enter the name of the purchaser in the
register as holder by transfer of the Shares so purchased by him.
(6) Any Share may be transferred by a Member to any of his lineal descendants,
father, brother, wife or husband of such Member and the restriction in these
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Articles shall not apply to any transfer authorized by these Articles provided that
it is proved to the satisfaction of the Board that the transfer bonafide falls within
one of these exceptions and provided that also it does not have the effect of
increasing the membership of the Company beyond fifty, or does not, in the
opinion of the Board, violate any provision of Law.
(7) Notwithstanding anything contained to the contrary in the preceding Articles any
Share or Shares may be transferred to any person not a Member, with the
previous unanimous consent in writing of all the Members for the time being of
the Company expressly waiving the rights, privileges and the restrictions
imposed for the transfer of Shares in these Articles.
37. Nothing in Article 36, shall apply to the transfer of the shares by the members to his
wife, son, daughter or any lineal descendant.
38. If the Board refuses to register the transfer of or the transmission by operation of law
of the right to any share, the Company shall within two months from the date on
which the instrument of transfer or the intimation of such transmission, as the case
may be, give notice of such refusal.
39. Subject to the provisions of section 154 of the Act, the registration of transfers may
be suspended at such times and for such periods as the Board may from time to time
Provided that such registration shall not be suspended for more than 30 days at any
one time or more than 45 days in the aggregate during any year.
40. No fees shall be charged by the Company on the registration of a probate, letters of
administration, certificate of death or marriage, power of attorney, or other similar
instruments of transfer.
TRANSMISSION OF SHARES
41. (1) On the death of a member, the survivor or survivors where the member was a
joint holder, and his legal representatives where he was a sole holder, shall be the
only persons recognized by the Company as having any title to his interest in the
(2) Any person becoming entitled to a share in consequence of the death or
insolvency of a member may, upon such evidence being produced as may
from time to time properly be required by the Board and subject as
hereinafter provided, elect, either-
(a) To be registered himself as holder of the share; or
(b) To make such transfer of the share as the deceased or insolvent
member could have made.
(3) The Board shall, in either case, have the same right to decline or
suspend registration as it would have had, if the deceased or insolvent
member had transferred the share before his death or insolvency.
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(4) If the person so becoming entitled shall elect to be registered as holder
of the share himself, he shall deliver or send to the Company a notice in
writing signed by him stating his intention along with evidence as may be
required by the Board.
(5) If the person aforesaid elects to transfer the share, he shall testify his
election by executing a transfer in respect of the share.
(6) All the limitations, restrictions and provisions of these regulations relating
to the right to transfer and the registration of transfers of shares shall be
applicable to any such notice of transfer as aforesaid as if the death or
insolvency of the member had not occurred and the notice of transfer
were a transfer signed by that member.
RIGHT TO RECEIVE DIVIDEND IN CASE OF TRANSMISSION
42. A person becoming entitled to a share by reason of the death or insolvency of the
holder shall be entitled to the same dividends and other advantages to which he
would be entitled if he were the registered holder of the share, except that he shall
not, before being registered as a member in respect of the share, be entitled in
respect of it to exercise any right conferred by membership in relation to meetings of
Provided that the Board may, at any time, give notice requiring any such person to
elect either to be registered himself or to transfer the share, and if the notice is not
complied with within ninety days, the Board may thereafter withhold payment of all
dividends, bonuses or other moneys payable in respect of the share, until the
requirements of the notice have been complied with.
FORFEITURE OF SHARES
43. If a member fails to pay any call, or installment of a call on the day appointed for
payment thereof, the Board may at any time thereafter during such time as any part
of the call or installment remains unpaid, serve a notice on him requiring payment of
so much of the call or installment as is unpaid, together with any interest which may
44. (1) A forfeited share may be sold or otherwise disposed of on such terms and
in such manner as the Board thinks fit.
(2) At any time before a sale or disposal as aforesaid, the Board may cancel
the forfeiture on such terms as it thinks fit.
45. (1) A person whose shares have been forfeited shall cease to be a member in
respect of the forfeited shares, but shall, notwithstanding the forfeiture,
remain liable to pay to the Company all moneys which, at the date of
forfeiture, were presently payable by him to the Company in respect of the
(2) The liability of such person shall cease if and when the Company received
payment in full of all such moneys in respect of the shares.
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46. (1) A duly verified declaration in writing that the declarant is a director,
manager or the secretary, of the Company, and that a share in the
Company has been duly forfeited on a date stated in the declaration shall
be conclusive evidence of the facts therein stated as against all persons
claiming to be entitled to the share.
(2) The Company may receive the consideration, if any, given for the share on
any sale or disposal thereof and may execute a transfer of the share in
favour of the person to whom the share is sold or disposed of.
(3) The transferee shall thereupon be registered as the holder of the share.
(4) The transferee shall not be bound to see to the application of the purchase
money, if any, nor shall his title to the share be affected by any irregularity
or invalidity in the proceedings in reference to the forfeiture, sale or
disposal of the share.
47. The provisions of these regulations as to forfeiture shall also apply in the case of
non-payment of any sum which, by the terms of issue of a share, becomes payable
at a fixed time, whether on account of the nominal value of the share or by way of
premium, as if the same had been payable by virtue of a call duly made and notified.
DEMATERIALISATION OF SECURITIES
48. Either the Company or the shareholders may exercise an option to issue or hold the
securities (including shares) with a depository in electronic form in which event the
rights and obligations of the concerned and the matters connected therewith or
incidental thereto, shall be governed by the provisions of the Depositories Act, 1996
and related laws and regulations as amended from time to time or any statutory
modification thereto or re-enactment thereof.
CONVERSION OF SHARES INTO STOCK
49. The Company may, by ordinary resolution, -
1. Convert any paid-up shares into stock; and
2. Reconvert any stock into paid-up shares of any denomination.
50. The holders of stock may transfer the same or any part thereof in the same manner
as, and subject to the same regulations under which, the shares from which the stock
arose might, before the conversion, have been transferred, or as near thereto as
Provided that the Board may, from time to time, fix the minimum amount of stock
transferable, so however that such minimum shall not exceed the nominal amount of
the shares from which the stock arose.
51. The holders of stock shall, according to the amount of stock held by them, have the
same rights, privileges and advantages as regards dividends, voting at meetings of
the Company, and other matters, as if they held the shares from which the stock
arose; but no such privilege or advantage (except participation in the dividends and
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profits of the Company and in the assets on winding up) shall be conferred by an
amount of stock which would not, if existing in shares, have conferred that privilege
52. Such of the regulations of the Company (other than those relating to share warrants),
as are applicable to paid-up shares shall apply to stock and the words “share” and
“shareholder” in those regulations shall include “stock” and ”stock-holder”,
POWER TO BORROW
53. Subject to the provisions of Section 58A and 292 , 293, 125,135 and other applicable
provisions of the Act, the Directors shall have power, from time to time and at their
discretion, to borrow, raise or secure the payment of any sum of money for the
purpose of the Company in such manner and upon such terms and conditions in all
respects as they think fit and in particular by the issue of debentures or bonds of the
Company or by mortgage or charge upon all or any of the properties of the Company
both present and future including its uncalled capital for the time being
54. The company shall in addition to any other meeting, in each year hold its Annual
General meeting in accordance with provisions of Section 166 of the Act, at such
time and place as may be determined by the board and shall specify the meeting as
such in the notice concerning the same. Any general meeting other than the annual
general meeting shall be called extraordinary general meeting.
55. The Board may whenever it thinks fit, call an extraordinary general meeting. Such
meetings may be called either at the discretion of the Board or on requisition of the
shareholders as per the provisions of section 169 of the Act.
NOTICE FOR GENRAL MEETING
56. A General Meeting of the Company may be called by giving not less than 21 days
notice in writing. A General Meeting may be convened giving shorter notice as
1) In the case of an Annual General Meeting, by all the members entitled to attend,
and vote thereat
2) In the case of any other meeting, by Members holding not less than ninety five
percent (95%) of the nominal value of the Shares entitled to vote there at. -
57. Notice of every General Meeting shall be given to every Member, to any person
entitled to a share in consequence of the death or insolvency of a Member, and to
the Auditors for the time being of the Company, in the manner hereinafter provided
for the giving of notice
58. Explanatory statement as defined in Sec-173(2) of the act shall apply to the
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59. (1) No business shall be transacted at any general meeting unless a quorum of
members is present at the time when the meeting proceeds to business.
(2) Save as herein otherwise provided, two members present in person shall be a
CHAIRMAN OF GENRAL MEETING
60. (1) The chairman, if any, of the Board shall preside as chairman at every general
meeting of the Company.
(2) If there is no such chairman, or if he is not present within fifteen minutes after the
time appointed for holding the meeting, or is unwilling to act as chairman of the
meeting, the directors present shall elect one of their numbers to be chairman of the
(3). If at any meeting, no director is willing to act as chairman or if no director is
present within fifteen minutes after the time appointed for holding the meeting, the
members present shall choose one of their numbers to be chairman of the meeting.
POWER TO ADJOURN MEETING
61. The chairman may, with the consent of any meeting at which a quorum is present,
and shall, if so directed by the meeting, adjourn the meeting from time to time and
from place to place.
(1) No business shall be transacted at any adjourned meeting other than the
business left unfinished at the meeting from which the adjournment took place.
(2) When a meeting is adjourned for thirty days or more, notice of the adjourned
meeting shall be given as in the case of an original meeting.
(3) Save as aforesaid, it shall not be necessary to give any notice of an adjournment
or of the business to be transacted at an adjourned meeting.
62. In the case of an equality of votes, whether on a show of hands or on a poll, the
chairman of the meeting at which the show of hands takes place or at which the poll
is demanded, shall be entitled to a second or casting vote.
VOTE OF MEMBER
63. Subject to any rights or restrictions for the time being attached to any class or classes
1. On a show of hands, every member present in person shall have one vote; and
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2. On a poll, the voting rights of members shall be as laid down in section 87 of the
64. A member of unsound mind, or in respect of whom an order has been made by any
Court having jurisdiction in lunacy, may vote, whether on a show of hands or on a
poll, by his committee or other legal guardian, and any such committee or guardian
may, on a poll, vote by proxy.
65. If a shareholder does not pay all the calls in respect of his shares then company may
allow to vote at the general meeting or not.
REPRESENTATIVE OF MEMBER COMPANY
66. Any company or body corporate which is a member of the company shall be entitled
to appoint by instrument in writing, such person as it thinks fit to act as its
representative at any meeting of the company held in pursuance of the Act. A person
authorized as aforesaid shall be entitled to exercise the same right and powers if it
were an individual member of the company.
67. Any company or body corporate which is a member of the company shall be entitled
to appoint by instrument in writing, such person as it thinks fit to act as its
representative at any meeting of the company held in pursuance of the Act. A person
authorized as aforesaid shall be entitled to exercise the same right and powers if it
were an individual member of the company.
68. The instrument appointing a proxy and the power of attorney or other authority, if any,
under which it is signed or a materially certified copy of that power of authority, shall
be deposited at the registered office of the Company not less than 48 hours before
the time of the meeting.
VALIDITY OF PROXY
69. A vote given in accordance with the terms of an instrument appointing a proxy shall
be valid, notwithstanding the previous death or insanity of the principal or the
revocation of the proxy or of the authority under which the proxy was executed or the
transfer of the shares in respect of which the proxy is given:
Provided that no intimation in writing of such death, insanity, revocation or transfer
shall have been received by the Company at its office before the commencement of
the meeting or adjourned meeting at which the proxy is used.
70. On a show of hands, every member present in person and in proxy shall have one
71. A Company by its articles is entitled to appoint more than one proxy to attend the
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72. Subject to the provision of Sec-252 read with Sec 259 of the Act the minimum
number of directors shall be two and maximum shall be twelve.
73. The First Directors of the Company will be:
1. [NAME OF FIRST DIRECTOR]
2. [NAME OF FIRST DIRECTOR]
74. The Directors need not hold any qualification shares in the Company.
REMUNERATION OF DIRECTOR
75. In addition to the remuneration payable to the Directors in pursuance of the Act, they
may be paid traveling, hotel and other expenses, properly incurred by them:
1. For attending and returning from meeting of the Board of directors or any
committee thereof or general meetings of the Company; or
2. In connection with the business of the Company.
76. The remuneration of the directors shall, in so far as it consists of a monthly payment,
be deemed to accrue from day to day.
77. A director who is either in whole time employment of the company or a managing
director may be paid remuneration by way of a monthly payment or at a specified
percentage of the net profit of the company or partly by monthly payment and partly
by specified percentage of profit.
78. Subject to the provisions of the Companies Act, 1956 and rules framed thereunder,
each Director may receive out of the funds of the Company by way of sitting fees for
his services a sum not exceeding the sum prescribed under the Companies Act
1956, for every meeting of the Board of Director or Committee thereof attended by
him, which may be differ from one director to another director.
CONTRACTS BETWEEN THE DIRECTOR AND COMPANY
79. Subject to the provisions of Section 297 of the Act, a Director shall not be disqualified
from contracting with the Company either as vendor, purchaser or otherwise for
goods, materials and services or for underwriting the subscription of any shares in or
debentures of the Company; nor shall any such contract or arrangement entered into
by or on the behalf of the Company with a relative of such Director, or a firm in which
such Director is a Member or Director, be avoided; nor shall any Director so
contracting be liable to account to the Company for any profit realized by any such
contract or arrangement by reason of such Director holding office or of the fiduciary
relationship thereby established.
APPOINTMENT OF ALTERNATE DIRECTOR
80. The Board of Directors may appoint alternate director subject to provisions of the act
to act for a Director during his absence for a period of not less than 3 months from
the place at which the meetings of the Board are ordinarily held.
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APPOINTMENT OF ADDITIONAL DIRECTOR
81. (1) The Board shall have power at any time and from time to time, to appoint a
person as an additional director, provided the number of the directors and additional
directors together shall not at any time exceed the maximum strength fixed for the
Board by these articles.
(i2) Such person shall hold office only unto the date of the next annual general
meeting of the Company but shall be eligible for appointment by the Company as a
director at that meeting subject to the provisions of the Act.
(3) Subject to provisions of the Act, a Director may resign from the office of director
by giving notice in writing addressed to the Company, or to the Board or to the
chairman and from that date his resignation is accepted.
GROUNDS OF VACATION OF OFFICE BY DIRECTORS
82. The office of director shall become vacant if he/she falls in any condition of sec 283
of the act
APPOINTMENT OF DIRECTOR FOR CASUAL VACANCY
83. If any Director appointed by the Company in general meeting vacates office as a
Director before his normal term of office, the resulting casual vacancy may be filled
up by the Board at a meeting of the Board subject to provisions of the act, but any
person so appointed shall retain his office only so long as the vacating Director would
have retained the same if no vacancy had occurred. Provided, further that any
person who has been removed from the office of Director under Section 284 of the
Act, may not be appointed as director to fill any vacancy that may arise.
84. The Company shall subject to the provisions of the Act, be entitled to agree with any
person, firm or corporation that he or it shall have the right to appoint his or its
nominee (hereinafter referred to as a "Nominee Director") on the Board of Directors
of the Company upon such terms and conditions as the Company may deem fit. The
Corporation, firm or person shall be entitled, from time to time to remove any such
Director or Directors and appoint another or others in his or their places. Such
directors He shall be entitled to the same rights and privileges and be subject to the
same obligations as any other Director of the Company, subject to the privileges
granted by the Act.
POWERS OF MANAGING DIRECTOR OR WHOLE TIME DIRECTOR
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85. The Board of Directors, subject to Section 292 of the Companies Act, 1956, may
entrust to and confer upon a Managing or Whole Time Director any of the powers
exercisable by them, upon such terms and conditions and with such restrictions as
they may think fit and either collaterally with or to the exclusion of their own powers
and may, from time to time, revoke, withdraw or alter or vary all or any of such
USE OF OFFICIAL SEAL
86. 1) The Directors shall provide a Common Seal for the purpose of the Company, and
shall have power from time to time to destroy the same and substitute a new seal in
lieu thereof and the Directors shall provide for the safe custody of the seal for the
2) The seal of the Company shall not be affixed to any instrument except by the
authority of a resolution of the Board or of a committee of the Board authorized by it
in that behalf, and except in the presence of at least one director or such other
person as the Board may appoint for the purpose; and such director or other persons
aforesaid shall sign every instrument to which the seal of the Company is so affixed
in their presence.
87. 1) The Board of directors shall meet at least once in every three calendar months for the
dispatch of business and at least four such meetings shall be held in every calendar year.
2) The Board shall have power to adjourn and otherwise regulate its meetings, as it
thinks fit, subject to the provisions of section 285 of the Act.
Not less than 1/3 of the total number of directors subject to minimum of 2 shall be
the requisite quorum for the Board meeting subject to provisions of the act.
89. The Board may elect a chairman for its meetings and determine the period for which
he is to hold office.
90. The Board shall cause minutes to be kept of every meeting of the Board or
Committee of the Board in accordance with Section 193 of the act.
APPOINTMENT OF COMMITTEES
91. The Board may, subject to the provisions of the Act, delegate any of its powers to
committees consisting of such member or members of its body as it thinks fit.
Any committee so formed shall, in the exercise of the powers so delegated, conform
to any regulations that may be imposed on it by the Board.
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92. 1) A committee may meet and adjourn as it thinks proper.
2) Questions arising at any meeting of a committee shall be determined by a majority
of votes of the members present, and in case of an equality of votes, the chairman
shall have a second or casting vote.
RESOLUTION BY CIRCULATION
93. Save as otherwise expressly provided in the Act, and also, subject to the provisions
of section 289 of the Act, a circular resolution in writing, signed by such of the
directors as are then in India, or by a majority of all the members of the Board or of a
committee thereof, for the time being entitled to receive notice of a meeting of the
Board or committee and to vote thereat, shall be as valid and effectual as if it had
been passed at a meeting of the Board or committee, duly convened and held. The
consent may be in the form of counterparts of the resolution.
VALIDITY OF THE ACT OF DIRECTORS
94. All acts done by any meeting of the Board or of a committee thereof or by any person
acting as a director, shall, notwithstanding that it may be afterwards discovered that
there was some defect in the appointment of any one or more of such directors or of
any person acting as aforesaid, or that they or any of them were disqualified as per
provisions of the act, be as valid as if every such director or such person has been
duly appointed and was qualified to be a director.
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GENERAL POWERS OF BOARD
95. Subject to Section 292 of the Act, the Board of Directors shall have the right to
delegate any of their powers to such managers, agents or other persons as they may
deem fit and may at their own discretion revoke such powers.
CHEQUES, PROMISSIORY NOTES AND NEGOTIABLE INSTRUMENTS
96. All Cheques, promissory notes, drafts, hundies, bills of exchange, and other
negotiable instruments and all receipts for monies paid to the Company shall be
signed, drawn, accepted, endorsed, or otherwise executed, as the case may be, by
such person and in such manner as the Board may , from time to time, determine by
97. Subject to the provisions of the Act a manager or secretary may be appointed by the
Board or by any person authorized by Board for such term, at such remuneration and
upon such terms and conditions as it may think fit; and any manager or secretary so
appointed may be removed by the Board by any person authorized by Board; and
A provision of the Act or these regulations requiring or authorising a thing to be done
by or to a director and the manager or secretary shall not be satisfied by its being
done by or to the same person acting both as director and as, or in place of, the
manager or secretary.
98. The Directors shall from time to time appoint/remove/transfer such number of officers
and subordinate staff, with such designation and such duties and authorities, as it
shall deem fit. Board shall have the power to remove such officer/s, staff and also
have power to transfer them to any of its branch anywhere.
99. The Company in general meeting may declare dividends, but such dividend shall not
exceed the amount recommended by the Board.
100. The Board may, before recommending any dividend, set aside out of the profits of the
Company such sums as it thinks proper as a reserve or reserves which shall at the
discretion of the Board, be applicable for any purpose to which the profits of the
Company may be properly applied, including provision for meeting contingencies or
for equalizing dividends; and pending such application, may, at the like discretion,
either be employed in the business of the Company or be invested in such
investments (other than shares of the Company) as the Board may, from time to time,
101. Any dividend, interest or other moneys payable in cash in respect of shares may be
paid to the order of the Registered holder or to his bankers by any mode, or by
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Cheque or warrant sent through the post directed to the registered address of the
holder or, in the case of joint holders, to the registered address of that one of the joint
holders who is first named on the register of members, or to such person and to such
address as the holder or joint holders may in writing direct.
Every such Cheque or warrant shall be made payable to the order of the person to
whom it is sent.
102. Notice of any dividend that may have been declared shall be given to the persons
entitled to share therein in the manner mentioned in the Act.
103. Any one of two or more joint holders of share may give effectual receipts for any
dividends, bonuses or other moneys payable in respect of such share.
104. Subject to provisions of the Act, the Board may from time to time pay to the members
such interim dividends as appear to it to be justified by the profits of the Company.
105. A Company may pay dividend in proportion to the amount paid up on each share
where a larger amount is paid up on some shares than on others.
106. Where shares are issued for the purpose of raising money to defray the expenses of
the construction of any work or building or the provision of any plant the company
may pay interest on so much of that share capital as is for the time being paid up for
the period and subject to conditions and restrictions as mentioned in Sec-208 of the
BOOKS AND ACCOUNTS
107. The Directors shall 'cause to be kept in accordance with Section 209 of the Act proper
books of accounts with respect to all sums of money received and expended by the
Company and the matters in respect of which the receipt and expenditure takes place
sales and purchases of goods by the Company; and the assets and liabilities of the
108. A company which has issued debenture may keep in any state or country outside
India a branch register of members or debenture holders resident in that state or
109. The books of accounts and other books and papers shall be kept at the office or
other place in India as the director think fit , and shall be open to inspection by any
director during business hours
110. The Board may 'from time to time determine whether and to what extent and at what
times and places and under what conditions or regulations the accounts and books of
the Company or any of them may be open to the inspection of Member not being
111. The books containing minutes shall be open for inspection 2 hours in a day during
112. There shall be attached to every Balance Sheet laid before the Company in General
Meeting a report of the Board in accordance with Sec 217 of the Act.
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113. 1) The books of account of the Company shall be examined and the correctness of
the Balance Sheet and Profit and Loss Account determined by one or more Auditor
or Auditors at least once every year.
2) Where the Company has a branch office the accounts of the branch office shall be
audited in accordance will Section 228 of the Act.
114. The Company shall at each Annual General Meeting by Ordinary Resolution/special
resolution as may be required as per provisions of the act appoint or re-appoint an
Auditor or Auditors to hold office from the conclusion of that meeting until the
conclusion of the next Annual General Meeting.
115. Every Auditor of the Company shall have a right of access at all times to the books
and vouchers of the Company and shall be entitled to obtain from the Directors and
Officers of the Company such information as may be necessary for the performance
of the duties of the Auditors.
116. The Auditor shall be entitled to receive all notices and Communications relating to
General meetings of the Company in accordance with Section 231 of the act and the
Auditors shall be entitled to attend any General Meeting and to be heard at any
General Meeting which he attends on any part of the business which concerns him
117. The Auditor's report shall be read before the Company in General Meeting and shall
'be open to inspection by any Member of the Company
118. Every manager, auditor, trustee, member of a committee, officer, servant, agent,
accountant or other person employed in the business of the Company shall, if so
required by the Board of Directors, before entering upon the duties, sign a
declaration pledging himself to observe strict secrecy respecting all bonafide
transactions of the Company with its customers and the state of accounts with
individuals and in matters relating thereto and shall by such declaration pledge
himself not to reveal any of the matters which may come to his knowledge in the
discharge of his duties except so far as may be necessary in order to comply with
any of the provisions in these presents and the provisions of the Companies Act,
CAPITALIZATION OF PROFITS
119. The Company in general meeting may, upon the recommendation of the Board,
1) That it is desirable to capitalize any part of the amount for the time being standing
to the credit of any of the Company‟s reserve accounts, or to the credit of the profit
and loss account, or otherwise available for distribution; and
2) That such sum is accordingly set free for distribution in the manner specified in
clause (1) amongst the members who would have been entitled thereto, if distributed
by way of dividend and in the same proportions.
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NOTICE TO MEMBERS
120. A notice or other document may be given by the Company to any Members resident
in India by sending it by post to him to his registered address in India, or if the
Member has no registered address in India, to the address, 'if any, supplied by such
member to the Company for the giving of notice to him. In the case if a Member who
is not a resident of India and who holds shares in the Company with the permission
of the Reserve Bank of India a notice or other document shall be given by the
Company by sending it by post to him at his registered address outside-India.
121. A notice or other document advertised in a newspaper circulating in the
neighborhood shall be deemed to be duly served on the day on which the
advertisement appears, on every Member resident in India who has no registered
address in India and has not supplied to the Company an address for the giving of
notices to him.
122. A notice may be given by the company to the joint holders of a share by giving the
notice to the joint holder whose name first appears in the Register in respect of
shares jointly held by him.
INSPECTION OF REGISTERS
123. Where under the Act any person, whether a Member of the Company or not, is
entitled to inspect any Register, return, certificate, deed, instrument or document kept
or maintained by the Company, the person so entitled shall have the right to inspect
the same during such business hours as may subject to the provisions of the Act in
that behalf, be determined by the Board or the Company in General Meeting, and the
Company shall comply with the provisions of the Act regarding the supply of copies of
any such Register, return, certificate, deed, instrument or other document.
DISTRIBUTION OF ASSETS
124. For the purpose aforesaid, the liquidator may set such value as he deems fair upon
any property to be divided as aforesaid and may determine how such division shall
be carried out as between the members or different classes of members.
The liquidator may, with the like sanction, vest the whole or any part of such assets in
trustees upon such trusts for the benefit of the contributories as the liquidator, with
the like sanction, shall think fit, but so that no member shall be compelled to accept
any shares or other securities whereon there is any liability.
125. If the Company is wound up, the liquidator may, with the sanction of a special
resolution of the Company and any other sanction required by the Act, divide
amongst the members, in specie or kind, the whole or any part of the assets of the
Company, whether they shall consist of property of the same kind or not.
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126. Subject to the provisions of Section 201 of the Act, the Company shall indemnify and
defend its Chairman, Managing Director, Manager, Company Secretary and other
officers and directors from and against any and all liability in connection with claims,
actions and proceedings (regardless of the outcome), judgment, loss or settlement
thereof, whether civil or criminal, arising out of or resulting from their respective
performances as officers and directors of the Company, except for the gross
negligence or willful misconduct of the officer or director seeking indemnification.
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We the several persons, whose name and address are subscribed below, are desirous of being
formed into a company in pursuance of these Articles of Association
S. Names, Description, occupation Signatures of Name addresses description and
No and addresses of each subscribers signature of witness or witnesses
Name and Address, Signatures, Occupation of Professional, who will witness the signatures of
Fathers Name Number of Shares
Address to be subscribed
Occupation (both in figures and
2. Name: Number of Shares
Fathers Name to be subscribed
Address (both in figures and
TOTAL Number of Shares
to be subscribed
(both in figures and
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