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Role of Articles of Association in Corporate Governance and Corporate Action
In corporate governance, a company's articles of association along with the memorandum of association form the company's constitution, defining the responsibilities of the directors, the kind of business to be undertaken, and the means by which the shareholders may exert control over the board of directors as well as listing the rights and duties of the members of the company. 

Table F of Companies Act 2013 (earlier Table A of Companies Act 1956)
 Table F (earlier Table A) prescribes a format for articles of association of a company prescribed in the Companies Act. A company limited by shares can adopt the articles in Table F/ Table A as its articles of association. The provisions of Table F / Table A will apply to a company even if it has filed its own articles if they do not specifically exclude or modify the provisions of Table F/ Table A. However, it is advisable to draft the articles of association to suit the purposes of the company.
Understanding the rationale for modifications to Table A
The articles under Table F (earlier Table A) are customized or modified for two purposes mainly:
  1. To provide for investor’s rights when investment is received – usually an investor enters into a shareholders agreement (SHA) prescribing certain restrictions on the actions of the company and the other shareholders (with respect to the company), which are subsequently incorporated into the articles of association to make them binding on the company.
  2. For granting certain powers to the company, which, as per the Companies Act, the company would only possess if the articles expressly provide for it. 
Some examples of the rights specifically granted under the articles are:
  •  Former Section 76 - to pay commission on issue of shares & debentures. A corresponding provision is absent so specific authority in articles is not required.
  • Section 68 (earlier Section 77A) - to buy-back the shares or other securities of the Company.
  • Section 55 (earlier Section 80) - to issue redeemable, cumulative preference shares.
  • Section 66 - (earlier Section 100) - to reduce the share capital of the Company
  • Former Section 208 prescribed the power to pay interest on capital. A corresponding provision is absent so specific authority in articles is not required.
(The full list of powers is contained in the specimen articles of association)
3. To prescribe internal governance mechanisms for various other matters – Under the Companies Act, private companies have additional flexibility in comparison with public and listed companies. that are applicable to public companies are not applicable to them. Many private companies eventually adopt a minimalistic set of articles (unless they have an external investor) leaving significant flexibility with the board of directors – this can be risky. It is prudent to prescribe limits on the powers of directors in the articles itself. 

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