Articles of association of a company
What are they?
They are the internal rules and regulations governing the operations of a company. The articles of association establish the governance structure, rights and obligations of shareholders, and other legal provisions of the company.
The articles of association are essential because they define the operational and organizational framework of the company. They are the document that regulates the company’s operation from its constitution to its dissolution, and they must be approved by the founding partners or shareholders. These can be modified in meetings or shareholder assemblies if necessary.
Key aspects to consider
The elements that are typically included in a company’s articles of association are:
- Corporate purpose: Defines the activity or activities the company is engaged in.
- Share capital: Establishes the amount of initial capital and how it is distributed among the partners or shareholders.
- Governance and administration: Regulates the structure of the governing bodies, such as the board of directors, the president, or the management team.
- Rights and obligations of shareholders: Includes details on dividend distribution, voting rights, transfer of shares, and other shareholder privileges.
- Duration and dissolution: Sets the company’s existence period and the conditions under which it can be dissolved.
In real estate, the articles of association of a real estate company or a real estate investment fund (REIT) are key to determining how assets are managed, how returns are distributed among investors, and how investment decisions are made. These articles must also comply with current legal regulations and the regulations of the financial markets where they operate.
The articles of association provide the legal foundation that ensures the company’s operations are conducted in a transparent and orderly manner, protecting the rights of all parties involved.