The articles of association set out the rules according to which a company must be run and administered. They regulate a variety of matters such as:
- appointment of company directors;
- issuing of new shares;
- circumstances allowing forced sale of shares; and
- procedures relating to board meetings and shareholder decisions.
The articles of association form a contract of membership between the company and shareholders. Directors are not a party to the contract and will not be in breach of contract for breaching anything under the articles; however they have their own director's duties and are subject to their directors' service agreements.