Why Articles of Association Matter More Than You Think
By Beatrice, Legal Clerk at Corpus Globe Corporate Solutions (CGCSo)
In an era of rapid regulatory change, cross-border commerce, and increasingly complex corporate governance, the Articles of Association (the “Articles”) often sit quietly in the background, overlooked but essential.
Yet for legal professionals, entrepreneurs, and board members, understanding the true role and relevance of this foundational document is not optional, it is critical.
Legal Foundation and Statutory Mandate
Under Section 25 of the Companies Act No. 10 of 2017 (the “Act”), every company is required to have Articles that govern its conduct. These Articles may impose restrictions on the type of business a company may undertake or the powers it may exercise. A company must not engage in any activity or exercise any power that is contrary to its Articles.
At its core, the Articles serve as a company’s internal rulebook. Section 26 of the Act affirms their status as the key legal document governing internal management. They define how the company operates, outlining the rights and responsibilities of directors and shareholders, and shaping the relationship between them. While legally mandated in most jurisdictions, including Zambia, their significance extends far beyond compliance.
Types of Articles of Association
Companies may adopt one of two types of Articles:
- Standard Articles
These are default provisions provided under the Act, commonly adopted by startups or small businesses to save time and legal costs. They are legally sound, cost-effective, and suitable for general business structures. The Act provides standard templates for both private and public companies.
- Non-Standard Articles
Tailored to meet the unique needs of a company, non-standard Articles are preferred by larger enterprises, family-owned businesses, or those with complex investor arrangements. They allow for custom rules, such as veto rights, shareholder agreements, and detailed procedures for meetings, share transfers, and director appointments.
Corpus Globe Corporate Solutions Limited (CGCSo) offers expert support in drafting non-standard Articles, known as CGCSo Model Articles, which include enhanced governance provisions permitted under the Act but not found in standard templates.
Conclusion: Foundational, Not Forgotten
In today’s governance landscape, where agility, transparency, and accountability are paramount, the Articles of Association are more than a legal formality, they are a strategic asset. Companies that treat their Articles as dynamic tools rather than dusty archives are better positioned to foster trust, guide decision-making, and ensure long-term resilience.
Corpus Globe Corporate Solutions Limited is here to help you unlock the full potential of your Articles. From drafting and customisation to compliance and governance support, our team is ready to guide you every step of the way.
Contact Us:
Phone: +260 211 296011 / 12 / 13 | +260 960 628385 | +260 770 628385 | +260 953 083688
Email: cgcso@cgcso.co.zm