How to Review Articles of Association: A Clause-by-Clause Checklist

How do you review Articles of Association? Review Articles of Association by reading them clause by clause and asking one question of every clause: if I am a minority shareholder or an incoming investor, what does this rule do to my money and my control? The clauses that matter most are the ones on share issues, transfer restrictions, reserved matters and voting, because those decide who gets diluted, who can exit, and who really controls the company. This checklist walks through the Articles in the order they usually appear, with the red flags to catch. It is written for someone reviewing a company's Articles before investing, joining the board, or buying shares. This is general information, not legal advice. Company law differs by jurisdiction, so have a company-law professional review Articles that matter before you rely on them. ## 1. Interpretation and relationship with the Act - Do the Articles adopt the statutory model (Table F in India) with changes, or replace it as a complete code?

• Do any clauses purport to override the Companies Act? They cannot. Red flag: a clause that tries to remove a protection the Act gives members. It is void, and its presence suggests the drafting was not reviewed. ## 2. Share capital and pre-emption - Is there a pre-emption right, so existing members are offered new shares before outsiders?
• Can the Board issue new shares, and on what approval? Red flag (minority): the Board can issue shares freely with no pre-emption. That lets the majority dilute you at will. This is one of the two clauses that most often harm a minority. ## 3. Variation of class rights - Can the rights on your class of shares be changed without that class's consent? Red flag: class rights alterable by a general majority rather than a special majority of the affected class. ## 4. Transfer and transmission of shares - Is there a right of first refusal, and how is price set on a transfer?
• Can the Board refuse to register your transfer, and on what grounds?
• Are there drag-along rights (you can be forced to sell) and tag-along rights (you can join a sale)? Red flag (minority): a drag-along with no matching tag-along, or Board discretion to block your exit with no price mechanism. You may find you cannot sell, or can be forced to sell on someone else's terms. ## 5. Reserved matters and control - Which decisions need a special majority or investor consent, and which the Board can take alone?
• Does any one party control the key decisions through nominee directors plus reserved matters? Red flag: important decisions, such as issuing shares, large borrowing or related-party deals, left to a simple Board majority that one faction controls. This is where real control hides. ## 6. Directors and the board - How are directors appointed and removed, and does any shareholder have a nominee right?
• What is the quorum, and can a meeting proceed without the investor's nominee present? Red flag: a quorum rule that lets the majority meet and decide while the minority's nominee is excluded or absent. ## 7. Voting and meetings - One vote per share, or weighted or multiple-vote shares?
• What notice and quorum apply to general meetings? Red flag: multiple-vote or golden shares that give one holder control out of proportion to their economic stake, unless you are that holder. ## 8. Dividends - Who decides dividends, and can a class be starved of returns? Red flag (minority): dividends entirely at the Board's discretion with no protection for a preference class that expected a return. ## 9. Amendment and entrenchment - Are any provisions entrenched so they cannot be changed without your consent?
• Could the Articles be amended later to strip out the protection you are relying on now? Red flag: the very protections you care about are amendable by the majority alone. Ask for them to be entrenched or mirrored in a shareholders' agreement. ## 10. Consistency with the shareholders' agreement - Do the Articles match the shareholders' agreement, or do they contradict it? Red flag: a term promised in the shareholders' agreement that does not appear in the Articles. Third parties and the Registrar rely on the Articles, so a right that lives only in a side agreement is weaker. ## Who should review the Articles, and when Review the Articles at three moments, because what you look for changes each time. Before you invest or buy shares, read them as an outsider deciding whether the deal protects your money and gives you a route to exit. Before you join as a director, read the indemnity, the quorum rules and the reserved matters, because those define your powers and your exposure. And before the company does anything structural, a new share class, a buy-back, a fresh fundraise, read the Articles to confirm the step is actually permitted and to see which resolutions and filings it triggers. The document does not change often, but the question you ask of it does. A practical tip: read the Articles next to the capitalisation table and the shareholders' agreement, not on their own. Many problems only appear when you line up what the Articles say about share issues and transfers against who actually holds what. A pre-emption right looks fine in isolation but may be undercut by a separate power the board holds elsewhere in the document, so trace each right through to the clause that could override it. ## A fast triage If you only have ten minutes, read three things: pre-emption on new shares (clause 2), transfer and drag/tag rights (clause 4), and reserved matters (clause 5). Dilution, exit and control live there. Everything else protects you at the edges. ## Where a contract workspace helps This checklist lets you review one set of Articles properly. The harder part is checking that the Articles, the Memorandum and the shareholders' agreement all say the same thing, tracking every special resolution and filing, and making sure a later amendment does not quietly remove a protection you relied on. Reviewing a set of Articles clause by clause, checking that the Articles, the Memorandum and the shareholders' agreement all say the same thing, and tracking every special resolution, filing and later amendment can sit in one AI workspace tuned to how your company is governed, rather than across separate files where a protection can quietly drop out. Adira is one such workspace. This checklist is enough to review one set of Articles well; a workspace is what keeps the Articles, the agreement and the filings aligned as the company grows.