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There are numerous legal aspects to consider when setting up a company, including the creation of a memorandum and articles of association. These documents form the legal foundation of a company and govern its structure, responsibilities and operation. In this article, we take a closer look at the importance of articles of association and bylaws for companies.
The articles of association: the basis of the company
The articles of association, also known as the memorandum of association or articles of association, is a crucial document when setting up a company. It sets out the basic framework conditions for business activities and regulates the relationships between the partners or shareholders. Here are some of the most important aspects covered in a partnership agreement:
Company name and registered office: The contract should clearly define the official name of the company and its registered office.
Partners or shareholders: The articles of association list the names and shares of the partners or shareholders and describe their rights and obligations.
Corporate purpose: It describes the purpose of the company and the type of business activity it will carry out.
Capital and capital contributions: The agreement regulates the amount of capital contributed by the partners or shareholders and the conditions for future capital contributions.
Management and representation: This determines who manages the company and the extent to which partners or shareholders are involved in the management.
Profit distribution and loss sharing: The agreement regulates how profits and losses are distributed among the partners or shareholders.
Voting rights and decisions: The voting rights of the partners or shareholders in important decisions are defined.
Entry and exit of partners or shareholders: The articles of association can regulate the conditions for the entry of new partners or shareholders and the departure of existing ones.
The articles of association: internal regulations and legal requirements
The articles of association are another key document for companies and serve to regulate internal operating procedures and legal requirements. While the articles of association set out the basic structure, the articles of association deal with details such as the election of the board of directors, the convening of general meetings and other organisational aspects. Here are some of the typical components of articles of association:
Bodies of the company: The articles of association define how the company is organised internally and which bodies exist, such as the board of directors and the management board.