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What are Articles of Association?
Articles of association (AoA) is a legal document that outline the rules and regulations of a company or organization. These articles exist to explain the details of a company’s operations and also include financial records and information about key tasks that a company aims to complete. Articles of association also include financial records and details about any director appointments.
Purpose of the Articles of Association
Articles of association act as a user’s manual for a company’s operations. These articles give specific details about business dealings and can include tasks such as how to create a financial report or how to appoint new company directors.
Articles of association are helpful to business owners and employees because they provide a roadmap to operating a company on a day-to-day and overall basis.
Even though the general idea of articles of association are similar across all industries, differences do exist from company to company. When writing the incorporation documents, certain things like corporate bylaws , signing authority, and even shareholder’s agreement information must be taken into account.
Companies can ensure their articles of association encompass all the needed components as long as the full picture of day-to-day objectives are taken into account.
When it comes to investing and the stock market, articles of association are vital. Corporate lawyers help companies define how stocks and bonds will be issued, how dividends are distributed, and how the information is documented and shared within the company and beyond.
These documents are also a great place for companies to set weekly, monthly, or yearly goals and to create a specific pathway to reach them.
Check out this article to learn more about the purpose of articles of association.
What’s Included in Articles of Association
Each state has its own rules when it comes to what should be included in articles of association, but there are also many similarities. Successful articles of association go into detail about many different types of day-to-day procedures for a company and should be as specific as possible. Using this practice ensures that a pathway exists for any company operation and also helps to bring down the corporate veil, also known as the corporate shield.
Here is an in-depth look at what’s included in articles of association:
Basic Details
The first thing articles of association establish is the basic details regarding a few different entities in relation to a corporation. This typically includes the names and addresses of the parties, including:
- Company itself
- Applicable agents
- Incorporators
Purpose and Duration of Purpose
Articles of association aim to outline the strategies for daily operations of a company on formal incorporation documents. The purpose of the company and the duration of that purpose is a big part of the store articles of association tell. This includes information about how a company is operated, governed, and who owns it.
Here are a few examples of a purpose that a company might cite in their AoA:
- Operation of a retail chain
- Management
- Provide lawn services to residential clients
- Manage stock portfolios
If a company is going into business for a limited amount of time, such as a seasonal, one-time objective, the date of expected completion must be noted. Companies can also list their duration as ongoing.
Distribution of Power
Corporations are made up of the people that run them. There is a hierarchy of workers at each one, starting with executive management, and trickling down to the employees that help run the operation. Articles of association define each role, and explains how power is distributed between each individual.
Company Organization
AoA documents include details about the organization of a company, such as the number of employees and directors. They also include information about the identities of any shareholders and founders of a company. Some even include details about advisors or auditors that are a part of the corporation.
Other Important Details
Since articles of association should be as all-encompassing as possible, there are several miscellaneous items that should be included in them. If any of the following apply to your company, you should include it in your articles of association:
- Member liability
- Decision records
- Attendance rosters and meeting minutes for general meetings
- Methods of communication
- Company seal use requirements
- Indemnity
- Insurance
- Shareholder’s agreement
- Fiduciary duty details
- Type of stock issued
- How much stock issued
- How dividends are paid
Here is an article about what should be included in articles of association.
Image via Pexels by Christina
When You Need Articles of Association
Articles of association are needed any time a new LLC is formed. Filing this legal document is a mandatory step toward establishing a new company. Until articles of association are filed with the state, the company is not recognized as a legal entity.
Until articles of association are filed, a company is not deemed “official.” It is also not wise to conduct business before they are created and filed, since these documents lay out the rules, regulations, and policies of the company’s day-to-day activities. AoA documents ensure that company personnel can stay compliant with these regulations, which avoids unnecessary bumps in the road later.
Here are a few more scenarios in which companies will need articles of association:
- Set up or open a new business bank account
- Apply for business loans
- Establish a legal identity with the government
- Separate personal assets from business ones
- Have a reference point for company rules and regulations
The only organizations that don’t require articles of association are sole proprietorships or partnerships, since they are considered to be legally established as soon as they conduct their first business transaction. If you are opening an LLC, there is no exception to this rule: you must file the articles of association for your new company before you begin to do business.
Find out more about when articles of association are needed at this link .
Articles of Association vs. Articles of Organization
Even though articles of association and articles of organization might sound similar, they have a several main differences. These two types of legal documents are filed based on what type of company is being opened.
Articles of Organization
Articles of organization are necessary to register corporations with their state government. These documents are required to bring new companies into existence and legitimize a company with the state it operates in. These documents notify the state government about the new corporation and provides specific details about the company, including information about the members and purpose of the organization.
Articles of Association
Articles of association are also formal documents that are filed to establish new limited liability companies. These documents include information such as company personnel details, stock offering amounts, and dividend payout information. Articles of association also define certain rule and regulations that companies will follow on a day- to-day basis.
To learn more about articles of association and articles of organizations and their differences, check out this link .
Get Help with Articles of Association
Are you ready to learn more about articles of association and what to include in them? You need the help of a corporate lawyer to help you through the process. Post a project on ContractsCounsel today to get connected with lawyers who specialize in articles of association.
Meet some of our Articles of Association Lawyers
Tim E.
Tim advises small businesses, entrepreneurs, and start-ups on a wide range of legal matters. He has experience with company formation and restructuring, capital and equity planning, tax planning and tax controversy, contract drafting, and employment law issues. His clients range from side gig sole proprietors to companies recognized by Inc. magazine.
Michael M.
www.linkedin/in/michaelbmiller I am an experienced contracts professional having practiced nearly 3 decades in the areas of corporate, mergers and acquisitions, technology, start-up, intellectual property, real estate, employment law as well as informal dispute resolution. I enjoy providing a cost effective, high quality, timely solution with patience and empathy regarding client needs. I graduated from NYU Law School and attended Rutgers College and the London School of Economics as an undergraduate. I have worked at top Wall Street firms, top regional firms and have long term experience in my own practice. I would welcome the opportunity to be of service to you as a trusted fiduciary. In 2022 I was the top ranked attorney on the Contract Counsel site based upon number of clients, quality of work and top reviews.
Ryenne S.
My name is Ryenne Shaw and I help business owners build businesses that operate as assets instead of liabilities, increase in value over time and build wealth. My areas of expertise include corporate formation and business structure, contract law, employment/labor law, business risk and compliance and intellectual property. I also serve as outside general counsel to several businesses across various industries nationally. I spent most of my early legal career assisting C.E.O.s, General Counsel, and in-house legal counsel of both large and smaller corporations in minimizing liability, protecting business assets and maximizing profits. While working with many of these entities, I realized that smaller entities are often underserved. I saw that smaller business owners weren’t receiving the same level of legal support larger corporations relied upon to grow and sustain. I knew this was a major contributor to the ceiling that most small businesses hit before they’ve even scratched the surface of their potential. And I knew at that moment that all of this lack of knowledge and support was creating a huge wealth gap. After over ten years of legal experience, I started my law firm to provide the legal support small to mid-sized business owners and entrepreneurs need to grow and protect their brands, businesses, and assets. I have a passion for helping small to mid-sized businesses and startups grow into wealth-building assets by leveraging the same legal strategies large corporations have used for years to create real wealth. I enjoy connecting with my clients, learning about their visions and identifying ways to protect and maximize the reach, value and impact of their businesses. I am a strong legal writer with extensive litigation experience, including both federal and state (and administratively), which brings another element to every contract I prepare and the overall counsel and value I provide. Some of my recent projects include: - Negotiating & Drafting Commercial Lease Agreements - Drafting Trademark Licensing Agreements - Drafting Ambassador and Influencer Agreements - Drafting Collaboration Agreements - Drafting Service Agreements for service-providers, coaches and consultants - Drafting Master Service Agreements and SOWs - Drafting Terms of Service and Privacy Policies - Preparing policies and procedures for businesses in highly regulated industries - Drafting Employee Handbooks, Standard Operations and Procedures (SOPs) manuals, employment agreements - Creating Employer-employee infrastructure to ensure business compliance with employment and labor laws - Drafting Independent Contractor Agreements and Non-Disclosure/Non-Competition/Non-Solicitation Agreements - Conducting Federal Trademark Searches and filing trademark applications - Preparing Trademark Opinion Letters after conducting appropriate legal research - Drafting Letters of Opinion for Small Business Loans - Drafting and Responding to Cease and Desist Letters I service clients throughout the United States across a broad range of industries.
Brianna N.
Brianna is a well-respected New York licensed attorney with a Juris Doctorate degree in law from Touro College Jacob D. Fuchsberg Law School and bachelor’s degree in Business Administration and Management from Dowling College. Since becoming an attorney, she has practiced in various areas including business law, corporate law, residential real estate, commercial real estate, criminal law, traffic law, employment law, landlord tenant law, estate planning, and has represented intermediaries in procurement and the personal protective equipment industry. Brianna has broad and extensive business experience; She is an entrepreneur and co-owner of a microtechnology manufacturing company that was built by her and her partner, where she also served as the Chief Legal Officer and Human Resource Manager for the company. While building the manufacturing business, she created a brokerage firm for business transactions and has managed several other businesses which she has ownership interest in. Brianna’s involvement in these various businesses over the past 15 years provides a unique skillset to her clients; Not only does she understand contractual principals and obligations from a legal perspective while drafting and negotiating agreements, but she also has the foresight, experience, and ability to ensure the agreement reflects the practical aspects of the business. Based on the client’s needs and desired outcome, she has the forethought to cover different angles that would be overlooked from a legal standpoint, and as a result she is able to help prevent unforeseen business ramifications. She conducts extensive risk assessments on behalf of her clients and minimizes exposure to potential liability without “over lawyering” agreements. One of Brianna’s main areas of focus is drafting and negotiating agreements. Negotiation is a passion of hers which was applied in law school while she was a member of the Alternative Dispute Resolution Society, notably winning Touro Law School’s intraschool negotiation competition. In her more recent years, Brianna has removed herself from her various business interests to focus on her law practice. Brianna has a strong moral compass and believes in quality over quantity. She treats every client as a top priority; thus, she will not take on many cases at a time because she wants to give each client the focus and attention they deserve. She has sharp attention to detail and is a forceful advocate for every client. Brianna has broad and extensive business experience; She is an entrepreneur and co-owner of a microtechnology manufacturing company that was built by her and her partner, where she also served as the Chief Legal Officer and Human Resource Manager for the company. While building the manufacturing business, she created a brokerage firm for business transactions and has managed several other businesses which she has ownership interest in. Brianna’s involvement in these various businesses over the past 15 years provides a unique skillset to her clients; Not only does she understand contractual principals and obligations from a legal perspective while drafting and negotiating agreements, but she also has the foresight, experience, and ability to ensure the agreement reflects the practical aspects of the business. Based on the client’s needs and desired outcome, she has the forethought to cover different angles that would be overlooked from a legal standpoint, and as a result she is able to help prevent unforeseen business ramifications. She conducts extensive risk assessments on behalf of her clients and minimizes exposure to potential liability without “over lawyering” agreements. Additionally, she specializes in drafting and negotiating agreements. Negotiation is a passion of hers which was applied in law school while she was a member of the Alternative Dispute Resolution Society, notably winning Touro Law School’s intraschool negotiation competition. In her more recent years, Brianna has removed herself from her various business interests to focus on her law practice. Brianna has a strong moral compass and believes in quality over quantity. She treats every client as a top priority; thus, she will not take on many cases at a time because she wants to give each client the focus and attention they deserve. She has sharp attention to detail and is a forceful advocate for every client.
Jeff C.
Experienced and broad based corporate/business attorney and Outside General Counsel (OGC), for start-ups, small businesses and growing companies of all sizes, advising and assisting clients with corporate and LLC formation, contracts and agreements, internet and terms of use/service agreements, trademarks and intellectual property protection, the purchase and sale of businesses (M&A), labor and employment matters, compliance and risk management, corporate governance, and commercial leasing matters. See other reviews on my website at www.ogcservices.net/reviews
Paul S.
I focus my practice on startups and small to mid-size businesses, because they have unique needs that mid-size and large law firms aren't well-equipped to service. In addition to practicing law, I have started and run other businesses, and have an MBA in marketing from Indiana University. I combine my business experience with my legal expertise, to provide practical advice to my clients. I am licensed in Ohio and California, and I leverage the latest in technology to provide top quality legal services to a nationwide client-base. This enables me to serve my clients in a cost-effective manner that doesn't skimp on personal service.
August 4, 2020
Christopher J.
Experienced attorney focusing on estate planning, probate administration, business formation and counseling, and consumer bankruptcy.
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