Think of the Articles of Association (AoA) as the internal rulebook of a company — it tells you how the company will be managed day-to-day. If the Memorandum of Association (MoA) is the company's constitution defining its purpose and powers, the AoA is the by-laws that govern internal operations: how meetings are called, how directors are appointed, how shares are transferred, and so on.
Section 5 lays down the law on what goes into this rulebook and how it can be protected. Every company must have an AoA containing regulations for management. The MCA prescribes certain mandatory matters that must appear — but companies are free to add more as they see fit. If your company doesn't draft certain clauses, don't worry — the model articles in Schedule I (Tables F through J) automatically fill in the gaps. Table F applies to companies limited by shares, Table G to companies limited by guarantee with share capital, Table H to companies limited by guarantee without share capital, Table I to unlimited companies with share capital, and Table J to unlimited companies without share capital.
The most exam-favourite concept here is entrenchment. Imagine Rajesh and Sunita are co-founders of a private limited company. They want to make sure that the clause giving each of them equal voting rights cannot be changed without both their consents — not even by a special resolution (which only needs 75% votes). They can entrench that clause, meaning it can only be altered if conditions stricter than a special resolution are met. Entrenchment can be built in at the time of formation, or added later — but if added later, a private company needs consent of ALL members, while a public company needs a special resolution. Either way, the company must notify the Registrar of Companies (RoC) about any entrenchment provisions. This is frequently asked as a 4-mark question — examiners love testing whether students know the different thresholds for private vs. public companies.
📊 Worked example
Example 1 — Model Articles filling the gap
Rajesh & Co. Pvt. Ltd. is incorporated in 2024. Its registered AoA is silent on the procedure for calling a board meeting.
Question: Which rules will apply?
Working:
- Section 5(8) states that where registered articles do not exclude or modify model article regulations, those model regulations apply automatically.
- Since the AoA is silent (neither excludes nor modifies the model rules), Table F provisions on board meetings kick in as if they were written in Rajesh & Co.'s own AoA.
Answer: Table F (Schedule I) model articles govern board meeting procedures for Rajesh & Co. Pvt. Ltd.
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Example 2 — Entrenchment in a Public Company
Sunrise Infra Ltd. (a public company) has 1,000 equity shareholders. After incorporation, the board wants to entrench a clause that restricts share transfers to outsiders.
Question: What is the procedure, and what must be done post-amendment?
Working:
- Step 1: Since this is a public company adding entrenchment after formation → a Special Resolution is required (≥ 75% of votes cast at a general meeting).
- Step 2: All 1,000 shareholders are notified of the EGM; resolution passes with 800 votes in favour (80% > 75% ✓).
- Step 3: Post-amendment, Sunrise Infra Ltd. must notify the RoC of the entrenchment provision in the prescribed form [Section 5(5)].
Answer: Special resolution + RoC notification. The entrenched clause can now only be altered under conditions stricter than a special resolution.
⚠️ Common exam mistakes
- Confusing MoA and AoA: Students mix up their purposes. Remember — MoA = what the company can do (external); AoA = how the company is managed (internal). Section 5 deals only with AoA.
- Missing the entrenchment threshold difference: Many students write 'special resolution is needed' for both private and public companies when adding entrenchment post-formation. Wrong — for a private company it requires consent of ALL members; only a public company needs a special resolution.
- Forgetting RoC notification: After including or amending entrenchment provisions, students forget that notice to the Registrar is mandatory under Section 5(5). This is a common 1-mark miss in theory questions.
- Wrong Table reference: Don't memorise all tables blindly, but do know that Table F = companies limited by shares (the most common type). Mixing up F, G, H in MCQs is a frequent error.
- Assuming old companies are covered: Section 5(9) clearly excludes companies registered under previous company law (e.g., Companies Act 1956) unless their articles are amended under the 2013 Act. Don't apply Section 5 rules to pre-2013 companies in exam problems without checking this.
📖 Bare Act text — Section 5, Companies Act 2013
(click to expand)
(1) The articles of a company shall contain the regulations for management of the company.(2) The articles shall also contain such matters, as may be prescribed:Provided that nothing prescribed in this sub-section shall be deemed to prevent a company from including such additional matters in its articles as may be considered necessary for its management.(3) The articles may contain provisions for entrenchment to the effect that specified provisions of the articles may be altered only if conditions or procedures as that are more restrictive than those applicable in the case of a special resolution, are met or complied with.(4) The provisions for entrenchment referred to in sub-section (3) shall only be made either on formation of a company, or by an amendment in the articles agreed to by all the members of the company in the case of a private company and by a special resolution in the case of a public company.(5) Where the articles contain provisions for entrenchment, whether made on formation or by amendment, the company shall give notice to the Registrar of such provisions in such form and manner as may be prescribed.(6) The articles of a company shall be in respective forms specified in Tables, F, G, H, I and J in Schedule I as may be applicable to such company.(7) A company may adopt all or any of the regulations contained in the model articles applicable to such company.(8) In case of any company, which is registered after the commencement of this Act, in so far as the registered articles of such company do not exclude or modify the regulations contained in the model articles applicable to such company, those regulations shall, so far as applicable, be the regulations of that company in the same manner and to the extent as if they were contained in the duly registered articles of the company.(9) Nothing in this section shall apply to the articles of a company registered under any previous company law unless amended under this Act.
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