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Question

Difficulty: MediumFormation and Types of Companies

During the formation of a limited liability company, the promoters are required to prepare official documents for registration. Which document specifies the internal rules and regulations governing the duties of directors, voting rights of members, and the conduct of meetings?

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

Answer

Articles of Association
The Articles of Association serve as the internal rulebook of a limited liability company, detailing internal administrative rules such as the appointment and powers of directors, rights of shareholders, and meeting procedures.

Step-by-Step Solution

1
Identify the purpose of company formation documents
Company registration requires constitutional documents that define both external relationships and internal operations.
Different legal documents serve distinct regulatory functions during incorporation.
2
Distinguish internal regulations from external constitutions and certificates
The document detailing internal administration, administrative powers of directors, calling of meetings, and internal governance is the Articles of Association.
The Memorandum of Association governs external scope and objects, whereas the Articles of Association regulate internal governance.

Key Concept

Articles of Association vs Memorandum of Association
Estimated Time:1m 0s
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Topics

Formation and Types of Companies

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