During the registration of a private limited company, the legal founders draft specific provisions detailing the rules for share transfer restrictions, the procedure for share forfeiture, and the rights and duties of the board of directors. In which statutory document must these operational rules be embodied, and what is its fundamental purpose?
- Articles of Association, which serve as the internal regulation framework governing the management and administration of the company.Answer
- BMemorandum of Association, which governs the internal administrative relationship between the directors and shareholders.
- CProspectus, which provides the legal framework for internal voting procedures and director appointments.
- DCertificate of Incorporation, which outlines the internal operational guidelines and share forfeiture terms.
Answer
Articles of Association, which serve as the internal regulation framework governing the management and administration of the company.
The Articles of Association govern the internal administration of a limited company, establishing procedures for share management (including transfer restrictions inherent to private limited companies), rights of shareholders, and executive powers of directors.
Step-by-Step Solution
Key Concept
Distinction between Memorandum of Association and Articles of Association