Which law states Articles of Association?:

The "Articles of Association" is defined under Section 2(5) of the Companies Act of 2013[1]. The AOA comprises all of the corporate policy's rules and regulations. Every company must have its own AOA, according to the Companies Act of 2013.

The company's articles of association are the rules and laws that regulate the company's internal operations and business behaviour management. They are written with the goal of carrying out the company's goals and objectives as outlined in the Memorandum of Agreement. The company's internal regulations are managed by the Articles. They define the officers' powers and responsibilities.

In the case of Naresh Chandra Sanyal vs Calcutta Stock Exchange Organization Ltd (AIR 1971 SC 422), the Supreme Court decided that the articles of association also create a contractual relationship between the members of the company and the company itself. This contract provides the standard rights, duties, and obligations that come with the company's objectives.

Why is it necessary for a firm to have AOA?:

Before and after a company's incorporation, both AOA and MOA are required. The documentation of the MOA and AOA is the most important aspect of forming a corporation. A firm cannot be registered without the MOA and AOA paperwork. AOA is primarily written for the benefit of the company as well as all personnel that are either directly or indirectly involved with it.

How can a business change its AOA?:

A company may change its articles specified in its AOA by passing a special resolution under Section 14 of the Companies Act, 2013. Within 15 days of making changes to a company's AOA, the registrar must receive a printed copy of the articles. The articles of association of a company can be changed in line with the provisions of the Companies Act and the circumstances stated in the memorandum. [paragraph 14(1)]

The articles' entrenchment provisions can only be changed at the establishment of a company or by modifying the articles with the consent of all company members in the case of a private company and by a special resolution in the case of a public company. [5(4) Section]

A Special Resolution must be passed by the Company to convert a Public Company into a Private Company and vice versa.

The AOA can be changed in the following ways: a new set of articles can be adopted.

Any new article can be added or inserted.

Any article can be deleted.
Any specific regulation can be changed or replaced.
Some Key Points to Remember About AOA Changes – AOA Changes Must Be Noted in Every Copy – Any change to a company's AOA must be noted in every copy of the AOA. These copies must be sent to members within seven days of receiving their request.
If the firm fails to comply with the provisions, the company and any of its officers who is in default are responsible for the failure. The penalty is one thousand rupees per day that the default persists, or one lakh rupees in the worst-case scenario.

What are the procedures for making an AOA change?
What are the procedures for making an AOA change?
There are precise actions that must be followed in order to change a company's AOA –

Call a Board meeting — First, call a Board meeting and identify the article that has to be changed. The modification does not simply apply to current articles. It could also entail the inclusion or removal of articles. Following that, a formal resolution is passed.

Any revisions to the AOA must adhere to the regulations of the Companies Act as well as the terms of the Company's Memorandum of Association. You must ensure that any such modifications do not enhance the liability or expulsion of any members.
For the general meeting to fix the resolution, a time, date, and location are set.

The notification of the general meeting must be issued by a Company Secretary.

After that, if your company's shares are listed on any recognised stock exchange, send copies of all shareholder notices about changes in the AOA to the stock exchange.

The ROC receives Form MGT-14 (Registrar of Companies).

Finally, you can make any necessary adjustments to all of the AOA copies.

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