POSITION OF AOA IN PUBLIC COMPANY
Kindly appreciate it is optional for a public companies limited by shares to get its articles registered. It may be registered without its own set of articles. Section 28 of the Companies Act, 1956 provides that if a public company does not register articles of its own, the provisions in Table 'A' of Schedule I to the Act will automatically apply to such company. Generally, a public company formulates its own Articles and registers it along with Memorandum. Therefore a public company may either:—
(i) formulate and register Articles of its own within the provisions of the Act and the Memorandum of Association; or
(ii) adopt Table 'A' of Schedule I as its Articles; or
(iii) partially adopt Table 'A' and also have its own articles.
As per the judgement in Seth Mohan Lal v Grain Chambers Ltd. (1968), If a company has not expressly or by implication excluded any regulation in Table A, regulation will be deemed to be incorporated in its articles.
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Now you are requested to check your AOA whether the same excludes “Table A”. If AOA specifically excludes “Table A” then provisions of your Public company AOA shall prevail over “Table A”.
If AOA includes “Table A” so far as it is applicable then also provisions of your Public company AOA shall prevail over “Table A” in case where any contradiction arise.
If your private company fully adopts “Table A”, then first of all contradiction should not arise, and if arise for some reason then provision of “Table A” shall prevail.
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POSITION OF AOA IN PRIVATE COMPANY
It is essential for a private limited company to have its own articles including the four restrictions as provided in section 3(1)(iii) of the Companies Act, 1956. [Section 27(3)].
With these restrictions the private limited companies are having liberty to adopt all or any of the regulations contained in Table 'A'.
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Now you are requested to check your AOA whether the same excludes “Table A”. If AOA specifically excludes “Table A” then provisions of your private company AOA shall prevail over “Table A”.
If AOA includes “Table A” so far as it is applicable then also provisions of your private company AOA shall prevail over “Table A” in case where any contradiction arise.
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Best Regards
Ankur Garg
CAclubindia
