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Microlesson · 5-min read

Articles of Association (AOA) - Meaning, Contents and Entrenchment

# Articles of Association (AOA)

## What is AOA? (Section 5)

The Articles of Association are the bye-laws of the company that lay down the rules and regulations for internal management.

Think of AOA as the company's internal rulebook — it tells how the company runs day to day, while the MOA tells what the company can do.

## General Contents of AOA

AOA typically covers:

1. Regulations for management of the company

2. Such matters as may be prescribed by the Act/Rules

3. Additional matters that the company considers necessary for its management

## Entrenchment Provision in AOA

Entrenchment means making certain provisions of the AOA harder to alter than what the Act ordinarily requires (e.g., requiring unanimous consent rather than a special resolution).

### When can entrenchment be introduced?

  • At the time of formation of the company, OR
  • By amendment in AOA

### Approval requirement

Company TypeApproval Needed
Private CompanyAgreement of ALL members
Public CompanySpecial Resolution

### Intimation to ROC

For an existing company introducing entrenchment by amendment, the company must intimate ROC within 30 days.

## Overriding Effect (Section 6)

The provisions of the Companies Act override both MOA and AOA. Any clause in MOA/AOA that conflicts with the Act is invalid to the extent of conflict.

## Effect of MOA & AOA (Section 10)

MOA and AOA, when registered, bind the company and its members as if they had been signed by the company and each member, and contain covenants on their part to observe all provisions of these documents.

Worked example

### Example 1

Example 1 — Entrenchment in a Private Company:

ABC Pvt Ltd wants to insert a clause in AOA that any change in the company's name will require approval of 100% of members (instead of the ordinary special resolution). Since it is a private company, the entrenchment provision can be added only if all members agree, and ROC must be intimated within 30 days.

### Example 2

Example 2 — Overriding Effect:

If the AOA of XYZ Ltd says directors can be appointed for life, but the Companies Act requires retirement by rotation, the Act prevails and the AOA clause is unenforceable.

⚠️ Common exam mistakes

  • Confusing AOA (internal rulebook) with MOA (charter document — what company does).
  • Thinking entrenchment in a public company can be passed by ordinary resolution — it requires a Special Resolution.
  • Forgetting that entrenchment in a private company requires consent of ALL members, not just a special resolution.
  • Missing the 30-day ROC intimation deadline when an existing company introduces entrenchment.
  • Believing AOA can override the Companies Act — Section 6 makes the Act supreme.
Bare-Act text Sections 5, 6, 10 · Companies Act, 2013 · click to expand
Section 5 — Articles of Association; Section 6 — Act to override memorandum, articles, etc.; Section 10 — Effect of memorandum and articles.
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