Articles of association for SPV company

[Debtosh Dey]

Articles of Association (AOA) u/s 5 of the Company's Act 2013 normally cover matters relating to share transfer, meetings, appropriation of profits, etc. For an SPV, usually shareholding and commercial agreements amongst the partnering companies are prepared first. What if these are built up in the AOA itself ? Sec 5 does not prevent any other matters relating to management nor does case laws say differently. I suppose, AOA is a contract amongst members inter se and between members and the company. Therefore, is there any problem in including commercial part of the agreements amongst members of SPV that have bearing on SPV's management, in the AOA (excepting the fact it may be a bit lengthy) ?

Debtosh Dey

[Ganeshan Kalyani]

Sir, obviously the querist query would have got resolved. However if reply is posted for the query the onlooker shall enrich their knowledge. Thanks.

[DR.MARIAPPAN GOVINDARAJAN]

In my view it could not be so.

[Debtosh Dey]

Thanks

AI Summary

Articles of Association may encompass member commercial arrangements affecting management, subject to contractual and enforceability considerations.
Whether an SPV's Articles of Association may validly incorporate commercial agreements among constituent members affecting management is queried; the proposer notes section 5 does not prohibit management-related provisions and that the AOA operates as a contract among members and the company, while a respondent states such inclusion could not be appropriate, leaving the legal permissibility and practical appropriateness in contention.