Skip to content

ACCA Applied Skills · Corporate and Business Law (Global) · The formation and constitution of a company

Zentra Ltd has adopted articles of association that state its objects and rules for running the company. Which of the following best describes the main purpose of a company's articles of association?

The articles of association set out the internal rules governing how the company is run, such as directors' powers, decision-making and meetings. They are the company's rulebook, not a register of auditors or a contract with customers.

  1. AThey set out the internal rules for how the company is managed, including the powers of directors and the conduct of meetingsCorrect
  2. BThey record the company's registered office address and the names of its auditors for public inspection
  3. CThey contain the contract between the company and each customer who buys its products

Explanation

The articles are the company's internal rulebook, dealing with directors' powers, meetings, share transfers and dividends. They are not a record of auditors or a contract with customers, which are matters outside the constitution.

Did you get it right without looking?

One question tells you little. A timed set on The formation and constitution of a company shows your real accuracy, how long you take and where you lose marks.

Practise The formation and constitution of a companyFree diagnostic mock

More The formation and constitution of a company questions