Class-8-Drafting of Commercial Contract.pdf

Drafting of various important contracts

1. Contract Drafting and Negotiation
Class-8
Prepared by: Anuj Pandey, Adv.
(CS, LLM, LLB, B Com (Hons))
Corporate Lawyer & Company Secretary
Email Id: [email protected]
Contact No.: 9555613873

2. Drafting of various important contracts


1.Manufacturing & Supply agreement;
2.Government Contracts;
3.Memorandum of Association;
4.Article of Association.

3. “
1.
Manufacturing
&
Supply agreement;
3

4. 4
.
WhatisaManufacturingAndSupplyAgreement?
AmanufacturingandsupplyagreementoftencalledtheMSA,isacontractbetweentwoorganizations.Itlaysouthow
onepartnerwillmanufactureorprovidegoodsforanotherpartner.Forexample,withanMSA,thesupplieragreesto
givethematerialsspecificqualitystandardsanddeliverthematagreed-uponintervals. Incontrast,thebuyeragreesto
takedeliveryofthosematerialsandpayfortheminadvance.
Thepartiesmayalsodecideonpaymentterms,andotherdetailssuchasinsurancecoverageagainstpossibledefectsor
recalls,warranties,andintellectualpropertyrights. Amanufacturingandsupplyagreementcanbecustomizedtomeet
manydifferentneeds.Forinstance,supposeabusinessislookingforamanufacturerwhocanproduceaproductin
volumequantities,butthatbusinessdoesn'tneeditdeliveredontimeeverymonth. Then,thiscouldbeagoodoption.

5. 5
Recitals/Definitions:-
•Define the parties (e.g. Buyer and Seller)
•Define the Effective Date of the agreement
•Define the Product(s) being manufactured, supplied and/or purchased (refer to Exhibit, below)
•Define any other terms that are important (e.g. “Exclusive”)
Product Manufacture and Supply:-
•Manufacture and Purchase.
•Spell out what is to be manufactured, supplied and/or purchased, including any relevant limitations thereof as it
pertains to the parties (refer to Exhibit, below)
•Make sure to address that such a provision is subject to the terms and conditions of the agreement
•Ownership of Intellectual Property; Licensing. Address relevant intellectual property rights related to the
•Product(s), including who owns such rights
•Address how the licensing of such intellectual property rights is needed to commence the agreement

6. 6

Term
Initial Term:
•How long is the agreement?
•When does the agreement start running?
•Upon the Effective Date?
•Upon “Acceptance” of the products?
•After inspection of the Product(s)?
Extension; Renewal
Terms:
•Is the agreement renewable?
•Does the agreement extend automatically?
•Is written notice needed for any extensions or renewals?

7. 7

Manufacturing Procedures:
Specifications
•What are the rules governing the manufacturing and supply of the Product(s)?
•Are these rules in written form and accessible to both parties?
•What type of notice is required if the Specifications are changed in any way?
Access to Facilities.
•Can one party enter the facilities of the other party in order to ensure the manufacturing process is being
handled appropriately?
•What are the scope and limitations of such access?
Rejected Products.
•How are Product(s) to be rejected?
•What type of notice is needed if the Product(s) are to be rejected? What type of inspection of the Product(s) is
allowed?
•How long is such inspection?
•What happens when a Product is property rejected?

8. 8

Purchase Orders:
•Are Products to be ordered on an ongoing basis?
•If so, address whether separate Purchase Orders will be needed for each order of Product(s).
•How are such Purchase Orders to be completed? What are the shipping dates, delivery dates and other timelines,
etc.?
Price and Payment:
•What is the Purchase Price of the agreement? Is the Purchase Price offset in any way? Are taxes included?
•Are the costs of raw materials included? Refer to Exhibit, below.
•What are the costs of late payments (e.g. Interest)? Refer to Exhibit, below.
Shipment, Freight Costs and Risk of Loss:
•What are the shipping and fright costs?
•How are the Product(s) delivered (e.g. F.O.B.)?
•Who bears the Risk of Loss? Spell this out carefully, including how and when Risk of Loss might shift from one
party to another (e.g. upon delivery).

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Limited Warranty; Disclaimer :
•Consider what types of warranties and/or representations are included as well as those that are disclaimed?
•Some relevant warranties include :
Merchantability
Fitness for a Particular Purpose
•Consider what warranties are express or implied? Are implied warrantied disclaimed?
•Consider how defects and workmanship related to the Product(s) are to be addressed.
•Are replacement parts/Product(s) offered in the event of a defect or problem related to workmanship?
Confidential Information; Intellectual Property Rights
•Confidential Information Define what information is “Confidential”
•What are the obligations of the parties regarding Confidential Information?
•Intellectual Property Rights Consider trademarks, trade names, trade secrets, copyrights and patents.
•Who owns such rights?
•If modifications are made to the Product(s), who owns the rights to such modified Product(s)?

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Indemnification:
•How and to what extent to the parties indemnify each other?
•Does this include officers, directors, employees, agents of the parties
•Is indemnification reciprocal between the parties
•What are the conditions for indemnification to trigger (e.g. threat of a lawsuit)
•How does such indemnification relate to intellectual property rights (see above)
•If any of the above representations or warranties turn out to be false, will that trigger Indemnification?
Limitation
of Liability:
•Are there any types of claims, damages or other causes of action for which one party will not be liable to the
other party? To a third party?
•What is the scope of such a limitation (i.e. does it cover tort, strict liability, contract)
•Is his provision reciprocal (i.e. does it apply to both parties)?

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Termination
•Are there any specified events where the agreement automatically terminates (e.g. breach vs. material breach)?
•What is the timeline and notice required for termination?
•Is there any period where breaches can be “cured” before termination occurs?
•What is the effect of termination? Consider ongoing payments, intellectual property rights, licenses, and so forth.
General Provisions
Force Majeure.
•What events (beyond the control of either party) relieve the parties of their respect obligations under the agreement.
Consider such events as: war, floor, epidemic, civil unrest, tumult, etc.
•What sort of notice is required (e.g. certified mail)? What are the respective addresses or other contact information
of the parties to where notice must be sent?
Entire Agreement (Merger Clause).
•Does this agreement reflect the entire agreement of the parties and supersede any prior agreements (oral or written)
between the parties? Are any exhibits, specimens, attachments, etc. to be included as part of the agreement?
•Amendments. May the agreement be amended? If so, how? In writing, signed by both parties?
•If one party fails to enforce its rights under the agreement, will that count as a waiver of such rights?

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ObligationsofThirdParties.
DoeseachpartyrepresentthatitsundertakingunderthisAgreementdoesnotviolateanyofitscontractual
obligations,expressorimplied,undertakenwithanythirdpartyandthatsuchpartyhastherightandauthorityto
enterintothisAgreement.
Maytheagreementbeassignedordelegatedinanyway?Ifnot,isthepriorapprovaloftheotherpartyrequired
forsuchassignment?Mustsuchapprovalbeinwriting?Doesnon-assignmentapplytobothparties?
GoverningLaw;Venue.Underwhatlawswilltheagreementbeinterpretedand/orgoverned?Whataboutconflicts
oflaws?Whatisthevenueforthisagreement?Doesthisincludestateandfederalcourtsinthatvenue?
DisputeResolution.
Ifanyclaim,conflict,controversyordisputearisesoutoforrelatestothisagreement,howisthatdisputetobe
resolved?Byarbitration?Ifso,howisarbitrationtobearranged?
Ifanypartoftheagreementisillegalorunenforceable,doesthataffecttherestoftheagreement?Typically,the
partieswillagreetotheopposite,inthatsuchunenforceabilityorillegalitywillnotinvalidatetherestofthe
agreement.

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Headings; Interpretation.
•Are the headings of the agreement meant solely for information purposes?
•Do the headings affect the interpretation or enforcement of the agreement in any way?
•Typically, the parties will agree that the headings do not affect the agreement.
•Can the agreement be executed in multiple counterparts?
Independent Contractor; Relationship of the Parties:
•Are the parties independent contractors to each other?
•Does this agreement create any sort of joint venture between the parties?
•What sort of remedies (e.g. injunctive relief, damages) are the parties entitled to should the agreement be
breached?

14. “
2.
Government
Contracts
;
14

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What is Government contract ?
•GovernmentcontractcanbedefinedasanycontractwhereonepartyiseitherCGorSG.Thiscontractrequiresthesameconditions
tobefulfilledasisrequiredforanyothercontract,withadditionalrequirementofArticle299(1),ConstitutionofIndia.Itwas
affirmedinthecaseofStateofBiharv.Majeed1,whereinHon’bleSupremeCourtheldthat,governmentcontractsarealso
governedbytheprovisionsofIndianContractActwithrespecttooffer,acceptanceandconsideration.
•ButsuchcontractsmustcomplywithArticle299(1)also.AndsubjecttoArticle299(1),thecontractualliabilityofCentralorState
Governmentissameasthatofanyindividualundertheordinarylawofcontract.Example,Atenderforthepurchaseofgoodsin
pursuanceofatendernotice,notificationorstatementinvitingtendersissuedbyoronbehalfofthePresidentortheGovernor,asthe
casemaybe,andacceptanceinwritingwhichisexpressedtobemadeinthenameofthePresidentorGovernorandisexecutedon
hisbehalfbyapersonauthorizedinthatbehalfwouldfulfilltherequirementsofArticle299(1).Someprivilegeisgiventothe
Governmentonaccountofdoctrinesofexecutivenecessityandpublicinterest.

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Legal Provisions:
Legal provisions relating to Government contract, Article 298 and 299 becomes relevant. Article 298 deals with the
executive power of the Union and of State to carry on trade and business and same has been provided below.
Article 298-Power to carry on trade, etc.-
The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to
the acquisition, holding and disposal of property and the making of contracts for any purpose:
Provided that-
(a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with
respect to which Parliament may make laws, be subject in each State to legislation by the State; and
(b) the said executive power of each State shall , in so far as such trade or business or such purpose is not one with
respect to which the State Legislature may make laws, be subject to legislation by Parliament.

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Article 299- Contracts:-
Article299(1)laysdownthat,acontracttobindtheGovernmentmustsatisfythefollowingrequirements:
a)ContractmustbeexpressedtobemadebythePresidentorbytheGovernoroftheState,asthecasemaybe,
b)ItmustbeexecutedonbehalfofthePresidentorbytheGovernoroftheState, asthecasemaybe,
c)ItmustbeexecutedbysuchpersonandinsuchmannerasthePresidentortheGovernormaydirectorauthorize..
(2)NeitherthePresidentnortheGovernorshallbepersonallyliableinrespectofanycontractorassurancemadeor
executedforthepurposesofthisConstitution,orforthepurposesofanyenactmentrelatingtotheGovernmentof
Indiaheretoforeinforce,norshallanypersonmakingorexecutinganysuchcontractorassuranceonbehalfofanyof
thembepersonallyliableinrespectthereof.

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Objective
InChatturbhujv.Moreshawar,itwasheldthat“inordertobindaGovernmentthereshouldbeaspecific
procedureenablingtheagentsoftheGovernmenttomakecontracts. Thepublicfundscannotbeplacedinjeopardyby
contractsmadebyunspecifiedpublicservantswithoutexpresssanctionofthelaw.”
Article299istherefore,basedonthegroundofprotectionofthegeneralpublic.
Article299(1)doesnotprescribeanyparticularmodeinwhichauthoritymustbeconferredonapersontoexecutea
contractonbehalfofthePresident/theGovernor.
Generally,itisdonebyNotificationintheOfficialGazette.Itcanalsobeconferredadhoconanyperson[Stateof
Haryanav.StateofPunjab,AIR2002SC685].Grantofgovernmentcontract,withoutpublishingadvertisementin
newspaperhavingwidecirculation,washeldtobearbitraryinthecaseofShaktiNarainSinghv.AnoopSingh,AIR
2004NOC386(All.).

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Effect of non-compliance of Article 299(1):
•TheprovisionofArticle299(1)ismandatoryinnatureandanycontraventionwillnullifythecontractrendering
themvoidandunenforceable.[Ushav.Govt.ofA.P.,AIR2013SC132]Itcanthereforebesaidthatsuch
requirementcannotbewaivedbyanyoftheparties. Andifthereiswaiverbyeitheroftheparty,itwillnotconfer
validityupontheinvalidagreement.
•[Bishandayalv.StateofOrissa, AIR2001SC544].Therefore,therecanbenoquestionofestoppelor
ratificationalsoinsuchcases.Also,insuchcases,doctrineofindoormanagementcannotbeapplied.
•[U.P.R.N.Nigamv.IndurePvt.Ltd.,AIR1996SC2373].Ifacontractisvoidbyreasonofnon-compliance
withtheprovisionsofArticle299(1),therightsofthepartiesaredeterminedunderSection70oftheContractAct,
1872.[LaliteshwarPrasadv.BaleshwarPrasad,AIR1966SC580].

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Benefit derived by the Government under the Contract:
Applicationofsection70oftheContractActManytimes,thecontractisenteredintoeitherorallyorthrough
correspondencewithoutstrictlycomplyingtotheprovisionsunderArticle299.
Insuchacase,ifwhathasbeendoneisforthebenefitofthegovernmentforitsuseandenjoyment,andis
otherwiselegitimateandproper,Section70oftheActshouldstepinandsupportaclaimforcompensation
madebythecontractingpartiesnotwithstandingthefactthatthecontractinquestionhasnotbeenmadeasper
therequirementsofArticle299.
Similarly,ifunderacontractwithagovernment,apersonhasobtainedanybenefit,hecanbesuedforthe
duesunderSection70oftheActthoughthecontractdidnotconfirmtoArticle299.IftheGovernmenthas
madeanyvoidcontractsitcanrecoverthesameunderSection65oftheAct.

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3.
Memorandum of
Association;
21

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Memorandum of Association (MOA):
•Memorandumofassociationofthecompanyisthefundamentalformationdocument.Itisthe
constitutionandcharterofthecompany.
•Itcontainsthebasicconditionsonthestrengthofwhichthecompanyisincorporated.Thus,itdefines
andconfinestheareaofoperationofthecompany.
•Itlaysdownthearea,beyondwhichtheactionofthecompanycannotgo.
•Sections4oftheCompaniesAct,2013andTableA,B,C,DandEinScheduleIasmaybeapplicable
tosuchcompanydealwithcontents,formandprintingandsignatureofmemorandumofassociation.

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Drafting of MOA:
It is pertinent to note that memorandum is the main edifice upon which the whole structure of the company is
erected. It is the basic document fundamental to its existence.
Further, it is also to be noted that as it is the charter of the company defining scope of its activity and extent of
power it could exercise, so that its shareholders, creditors, bankers and other third parties who deal with the
company could know the range of the company’s enterprise.
Based on the provisions of Section 4 of the Companies Act, 2013, the main drafting requirements of contents of a
Memorandum are summarized below:
1. Name of the company
AsperSection4(1)(a)oftheCompaniesAct,2013,inthecaseofapubliclimitedcompanythenameofthe
companyshouldlastwiththeword“Limited”,orinthecaseofaprivatelimitedcompany,thenameofthecompany
shouldlastwiththewords“PrivateLimited.IncaseofCompaniesRegisteredunderSection8oftheCompanies
Act,2013theseprovisionsdoesnotapply

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2. Registered Office of the Company:
As per Section 4(1) (b) the memorandum of the company should mention the State in which the registered office of the company isto be
situated;
3.ObjectsoftheCompany:
TheMemorandumofAssociationisadocumentwhichsetsouttheconstitutionofacompanyandisthereforethefoundationonwhichthe
structureofthecompanyisbuilt.Itdefinesthescopeofthecompany’sactivitiesanditsrelationswiththeoutsideworld.
Thefirststepintheformationofacompanyistoprepareadocumentcalledthememorandumofassociation.Infact,memorandumisoneof
themostessentialpre-requisitesforincorporatinganyformofcompanyundertheCompaniesAct,2013.
ThisisevidencedinSection3oftheAct,whichprovidesthemodeofincorporationofacompanyandstatesthatacompanymaybeformed
foranylawfulpurposebysevenormorepersons,wherethecompanytobeformedisapubliccompany;twoormorepersons,wherethe
companytobeformedisaprivatecompany;oroneperson,wherethecompanytobeformedisaOnePersonCompanybysubscribingtheir
namesorhisnametoamemorandumandcomplyingwiththerequirementsofthisActinrespectofitsregistration.

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4.TheLiabilityofMembers:
Thisclauseofmemorandumshouldstatetheliabilityofmembersofthecompany,whetherlimitedorunlimited,
andalsostate,–
(i)Inthecaseofacompanylimitedbyshares,thatliabilityofitsmembersislimitedtotheamountunpaid,if
any,onthesharesheldbythem;and
(ii)Inthecaseofacompanylimitedbyguarantee,theamountuptowhicheachmemberundertakesto
(A)totheassetsofthecompanyintheeventofitsbeingwound-upwhileheisamemberorwithinoneyear
afterheceasestobeamember,forpaymentofthedebtsandliabilitiesofthecompanyorofsuchdebtsand
liabilitiesasmayhavebeencontractedbeforeheceasestobeamember,asthecasemaybe;and
(B)Tothecosts,chargesandexpensesofwinding-upandforadjustmentoftherightsofthecontributories
amongthemselves;

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5. Capital Clause:
Thisclauseofmemorandumofassociationofcompanyshouldincludeinthecaseofacompanyhavingashare
capital,–
(i)theamountofsharecapitalwithwhichthecompanyistoberegisteredandthedivisionthereofintoshares
ofafixedamountandthenumberofshareswhichthesubscriberstothememorandumagreetosubscribe
whichshallnotbelessthanoneshare;and
(ii)Thenumberofshareseachsubscribertothememorandumintendstotake,indicatedoppositehisname;
6
.NameofonepersonCompany’sSubscriber:
InthecaseofOnePersonCompany,thememorandumofassociationofacompanyshouldcontainthenameof
thepersonwho,intheeventofdeathofthesubscriber,shallbecomethememberofthecompany.
ThememorandumofacompanyshallbeinrespectiveformsspecifiedinTablesA,B,C,DandEinScheduleI
asmaybeapplicabletosuchcompany.
Anyprovisioninthememorandumorarticles,inthecaseofacompanylimitedbyguaranteeandnothavinga
sharecapital,purportingtogiveanypersonarighttoparticipateinthedivisibleprofitsofthecompanyotherwise
thanasamember,shallbevoid.

27. “
4.
Article of Association
27

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ARTICLE OF ASSOCIATION:
AccordingtoSection2(5)oftheCompaniesAct,2013,‘articles’ meansthearticlesofassociationofacompanyas
originallyframedorasalteredfromtimetotimeorappliedinpursuanceofanypreviouscompanylaworofthisAct.It
alsoincludestheregulationscontainedinTableAinScheduleIoftheAct,insofarastheyapplytothecompany.
Intermsofsection5(1),thearticlesofacompanyshallcontaintheregulationsformanagementofthecompany.The
articlesofassociationofacompanyareitsbye-lawsorrulesandregulationsthatgovernthemanagementofitsinternal
affairsandtheconductofitsbusiness.Thearticlesplayaveryimportantroleintheaffairsofacompany.Itdealswith
therightsofthemembersofthecompanyinterse.Theyaresubordinatetoandarecontrolledbythememorandumof
association.
AnarticleofAssociationisanotherequallyimportantdocumentforincorporationofalimitedcompany.Articlesare
rulesandregulationsformanagementofinternalaffairsofthecompany.Itconstitutesacontractbetweenthecompany
anditsmembersandmembersinterse.Itisframedwiththeobjectofcarryingoutaimsandobjectsofthecompanyas
containedinMemorandumandifnecessaryitmayclarifyanythingcontainedinMemorandum.Thearticleofa
companycontainstheregulationsformanagementofthecompanyandothersuchmatters,asmaybeprescribed:

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ENTRENCHMENT PROVISIONS
Thearticlesmaycontainprovisionsforentrenchmenttotheeffectthatspecifiedprovisionsofthearticlesmaybe
alteredonlyifconditionsorproceduresthataremorerestrictivethanthoseapplicableinthecaseofaspecial
resolution,aremetorcompliedwith.[Section5(3)]
TheCompaniesAct2013, recognizesaninterestingconceptofentrenchment. Essentially,theentrenchment
provisionsallowforcertainclausesinthearticlestobeamendeduponsatisfactionofcertainconditionsorrestrictions
greaterthanthoseprescribedundertheAct(suchasobtaining100%consent).Thisprovisionactsasaprotectionto
theminorityshareholdersandisofspecificinteresttotheinvestmentcommunity.Thisshallempowerthe
enforcementofanypre-agreedrightsandprovidegreatercertaintytoinvestors,especiallyinjointventures.
Theprovisionsforentrenchmentreferredtoinsection5(3)shallbemadeeither(a)onformationofacompany,or(b)
byanamendmentinthearticlesagreedtobyallthemembersofthecompanyinthecaseofaprivatecompanyandby
aspecialresolutioninthecaseofapubliccompany.[Section5(4)]
Wherethearticlescontainprovisionsforentrenchment,whethermadeonformationorbyamendment,thecompany
shallgivenoticetotheRegistrarofsuchprovisionsinsuchformandmannerasmaybeprescribed.[Section5(5)]

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Contents of Articles:
Thearticlessetouttherulesandregulationsframedbythecompanyforitsownworking. Thearticles
shouldcontaingenerallythefollowingmatters:
1.ExclusionwhollyorinpartofTableF.
2.Adoptionofpreliminarycontracts.
3.ShareCapital,variationofrights,Numberandvalueofshares.
4.Issueofpreferenceshares.
5. Allotment of shares.
6. Calls on shares.
7. Lien on shares.
8.Transferandtransmissionofshares.
9. Nomination.
10. Forfeiture of shares.
11. Alteration of capital.
12. Buy back.

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14. Dematerialisation 15.Conversionofsharesintostock.16.Votingrightsandproxies.
17.MeetingsandrulesregardingcommitteesoftheBoard.
18.Directors,theirappointmentanddelegationsofpowers.
19. Nominee directors.
20.IssueofDebenturesandstocks.
21. Audit committee.
22.Managingdirector,Whole-timedirector,Manager,Secretary,ChiefExecutiveOfficerandChiefFinancialOfficer.
23. Additional directors.
24. Seal.
25. Remuneration of directors.
26.Generalmeetings,proceedingsatgeneralmeetings,adjournmentofmeeting.
27.BoardofDirectors,ProceedingsoftheBoardmeetings.
28. Borrowing powers.
29. Dividends and reserves.
30. Accounts and audit.
31. Winding up.
32. Indemnity.
33.Capitalisationofprofits,reserves.
34. Secrecy

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Drafting of Articles
Itshouldcontainstrictlyonlyrelevantandnecessarymatters.Initsdraft,effortsmustbemadetoincorporate
comprehensiveprovisionssoastocoverallstatutoryrequirementsandallpossiblecontingencies. Anyalteration
requirescumbersomeproceduretobefollowedwhichisexpensiveandtimeconsuming.
Articles,asapublicdocumentofthecompany,haveevidentiaryvalueinmatterswhichinvolvedealingofthe
companywithitsownmembersorthirdparties.Anypersonoutsiderhasconstructivenoticeofthecontentsof
Articlesandexpectedtoinspectbeforeenteringintoanytransactionwiththecompany.Articlesmustbesigned
bythesubscribersoftheMemorandumandberegisteredalongwiththeMemorandum.Incaseofdraftingthe
articlesforacompanylimitedbyshares,thedraftsmancanfollowthefollowingalternatives:
(i)AdoptTableFofSchedule1inCompaniesAct,2013infull;or
(ii)ExcludeTableAwhollyandregisterownArticlessuitingitsrequirements; or
(iii)RegisterownarticlesandinadditiontheretoallowsTableAtoapplysofarasitisnotmodifiedorexcluded
bythearticles.
Articlesshallbedividedintoparagraphsnumberedconsecutively.Thiswillhelpthecompanytoalterthearticles
conveniently

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ImportantpointstobeconsideredwhiledraftingtheAOA:
1.Sharecapital,itskindsrightsattachedtodifferentkindsofsharesoranyspecialprivilegesattachedthereto
shouldbeconsideredandincorporatedinArticles.
2.Directors–appointmentofdirectors,theirnotingrights,resignations,terminationetc.shouldbegivendue
considerationandtheirrights,powersandprivilegesshouldbeincorporatedinArticlesProportionalrepresentations
mayalsobelookedinto.
3.InGovernmentCompanies,JointSectorCompanies,JointVentureswithforeigncompanies,jointventurewith
GovernmentCompanies,themaintermsoftheirpartnershipinShareCapitalaswellasthemanagementofthe
affairsofthecompanywithpowerandauthoritydelegationberelevantlydiscussedintheArticleswithscopeand
limitationstheretotoavoidanymisinterpretation.
4.Asfaraspossible,regulationgiveninTableFmaybeborrowed,evenifitisnotmadeapplicablesothatArticle
mayconformtotheintentandspiritoflaw.
5.Effortsshouldbemadetomakeeacharticleselfexplanatoryandselfinterpretativetoavoidmisleading
conclusions. Coherenceandsequenceofthecontentsshouldbemaintainedatanycosts.

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6.AnyitemswhicharealreadymentionedinMemorandumandistobementionedinArticles,itisbetter thatitisput
inwordssuchas“asmentionedinMemorandumofAssociation”whichwillskiptherequirementofalteringArticles
whenMemorandumisaltered.
7.NoprovisionwhichacompanycannotdoeitherasperMemorandumorCompaniesActoranyotherlaw,should
findaplaceinarticles:e.g.expulsionofmembers.ThisisopposedtoCompanyJurisprudenceandisultraviresofthe
Act.
8.WherethecompanywouldrequireassistancefromfinancialInstitutions,provisionsbemadeforappointmentof
nomineedirectors,conversionofloansfromfinancialinstitutionsintoequityetc.

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Contact No. 9555613873