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Difficulty: EasyPrivate Limited Companies: Characteristics, Formation Documents, and Capital

Which formation document of a private limited company sets out the internal rules governing the rights, duties, and management of its directors and shareholders?

  1. Articles of AssociationAnswer
  2. B
    Memorandum of Association
  3. C
    Prospectus
  4. D
    Certificate of Trading

Answer

Articles of Association
The Articles of Association contains the internal regulations and bye-laws governing the administrative management of the company, the rights and duties of directors, share transfer procedures, and voting rights.

Step-by-Step Solution

1
Identify the primary purpose of key incorporation documents.
The document regulating internal governance and officer duties is required.
Companies require separate legal instruments for external boundary definition and internal operational rules.
2
Distinguish between Memorandum of Association and Articles of Association.
The Articles of Association contains internal regulations, whereas the Memorandum of Association establishes external relationships and object clauses.
Under company law, internal administration and shareholders' rights are specifically governed by the Articles of Association.

Key Concept

Articles of Association vs. Memorandum of Association in Private Limited Companies
Estimated Time:45s
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Topics

Private Limited Companies: Characteristics, Formation Documents, and Capital

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