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Chapter 2: Articles of Association
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Article A: Contents of Articles and their
Alteration
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15. Every company shall have articles of
association as provided in this Article.
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Articles of association of a company
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16. The articles of association of a company as
registered shall be effective from the date of its incorporation.
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Validity of articles of association
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17. (a) The articles of association shall be
considered as a contract between the company and its shareholders, and between
its shareholders themselves.
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Articles of association as a contract
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(b) Alteration of the
articles of association shall be effected in the ways provided in this Law.
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18. The articles of association of a company shall
contain the following details:
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Details that must be included in the articles of
association
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(1) the name of the company;
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(2) the objects of the company;
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(3) details regarding the registered share capital,
as provided in sections 33 and 34;
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(4) details regarding the limitation of liability,
as provided in section 35.
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19. A company may include in its articles of
association matters relating to the company or to its shareholders, including
the following:
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Details that may be included in the articles of
association
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(1) the rights and duties of the shareholders and
of the company;
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(2) provisions regarding ways of managing the
company;
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(3) any other matter that the shareholders have
seen fit to settle in the articles of association.
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20. (a) A company may alter its articles of
association by a resolution passed by an ordinary majority at the general
meeting of the company, unless the articles of association provide that a
different majority is required, or if a resolution is passed in accordance with
section 22.
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Amendment of articles of association
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(b) Where there is a
provision in this Law which may be contracted out of, or where there is a
provision in the articles of association stating that a particular majority is
required for the alteration of some or all of the provisions thereof, the
company shall only be allowed to alter such provision by resolution passed at
the general meeting with the same particular majority or proposed majority,
whichever is the greater.
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(c) Where the shares of
the company are divided into classes, no alteration shall be made to the
articles of association that will affect the rights of any class of shares
without the approval of a meeting of such class, unless otherwise provided in
the articles of association; the provisions of subsections (a) and (b) shall
apply mutatis mutandis to the passing of decisions in the meeting of the
class.
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(d) Notwithstanding the
provisions of this section, an alteration of the articles of association
requiring a shareholder to purchase further shares or to increase the scope of
his liability shall not bind the shareholder without his consent.
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21. (a) The alteration of the articles of
association, other than alterations under section 40, shall be valid from the
date of passing the resolution in respect thereof by the company, or on such
later date as may be fixed by the company by resolution.
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Validity of alteration and reporting
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(b) A company that has
passed a resolution to alter its articles of association shall deliver the
wording of the resolution to the Registrar, within fourteen days of the date of
the resolution.
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22. (a) A company may by contract limit its power
to amend the articles of association, or provisions of it if a resolution to
that effect is passed by the general meeting, by the majority required for the
alteration of the articles of association.
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Limitation on altering the articles of association
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(b) A resolution passed
as aforesaid in subsection (a) shall be treated as a resolution to alter the
articles of association and the provisions of this Article shall apply thereto.
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23. (a) The articles of association shall be signed
by the first shareholders and the shares allotted to them shall be noted
therein, as shall be the name, address and identity number of each such
shareholder.
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Signature of articles of association
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(b) An advocate shall verify the identity of the
signatories to the articles of association by his signature on the articles of
association.
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24. A company incorporated prior to the
commencement of this Law may:
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Transitional provisions regarding memorandum and
articles of association
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(1) alter the provisions laid down in its
memorandum in the manner and subject to the conditions provided therefor in the
Companies Ordinance as it stood immediately prior to the commencement of this
Law, subject to the provisions of paragraph (5);
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(2) alter its memorandum or rescind it in the
manner prescribed in section 350(a), (i), (j), (k) and (l);
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(3) alter the provisions laid down in its articles
of association in a resolution passed at a general meeting by a majority of
seventy-five percent of those present, or by such other majority as may be
prescribed in the memorandum of the company or in its articles of association;
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(4) lay down in its articles of association,
subject to the provisions of section 20(b), a provision regarding the majority
required to alter the provisions of the articles of association, in a resolution
made by a majority of seventy five percent of those present at the general
meeting, and by a larger majority if such is laid down in the memorandum of the
company or in its articles of association; where such a new provision is laid
down, the provisions of section 20(b) shall apply to its alteration;
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(5) prescribe in its memorandum, by resolution
passed at the general meeting by a majority of seventy five percent of those
present, a provision relating to the alteration of the majority required to
alter provisions in the memorandum that the general meeting is authorized to
alter; the provisions of section 20(b) shall apply in this regard, mutatis
mutandis.
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