How to Write Articles of Association
Articles of association are the rulebook for how a company runs: meetings, quorums, directors and the financial year. CAMA supplies defaults, and these override them.
What a articles of association/ corporate bylaws is
Articles of association are the internal rulebook of a company. In American usage the same document is called corporate bylaws.
They govern how the company operates: when shareholders meet, how many people constitute a quorum, how many directors there are, how long they serve, how they resign, who chairs the board, and when the financial year ends.
In Nigeria the articles are filed with the Corporate Affairs Commission as part of incorporation under the Companies and Allied Matters Act 2020. CAMA provides model articles that apply by default, and a company can adopt them, modify them, or write its own.
Most small Nigerian companies take the model articles without reading them, which is fine until a disagreement arises and everybody discovers what the default position actually is.
Who needs one
Companies being incorporated that want governance rules suited to their situation rather than the statutory defaults.
Existing companies whose circumstances have outgrown their original articles, particularly after taking on shareholders.
Businesses with several shareholders, where the rules on meetings and quorum decide who can actually make decisions.
A company with a single owner and director gets less from bespoke articles, though even there the financial year end matters.
Before you start
Decide the governance shape first.
How many directors the company will have, and whether that number should be fixed or a range.
What proportion of shareholders must be present for a meeting to be valid.
How long directors serve before facing reappointment.
When the financial year should end, which has tax and audit consequences.
And where meeting records will be kept, since the obligation to maintain them is real.
The walkthrough
Filling in the form, step by step
Every question you will be asked, what it means, and an example of a good answer.
Step 1 of 2
Articles of Association/ Corporate Bylaws
The company, the annual meeting and quorum
This step covers the shareholders' side of governance.
The annual general meeting is a statutory requirement for most Nigerian companies under CAMA, with an exemption for small companies and single member companies. Setting the month gives the business a predictable rhythm and makes it harder for the meeting to be quietly skipped, which is what happens when no date is fixed.
Quorum is the important answer here. It decides how many shareholders must be present for decisions to be valid, and it cuts both ways. Set it too low and a minority can hold a meeting the majority knew little about. Set it too high and one uncooperative shareholder can paralyse the company by simply not attending.
For a company with two or three shareholders, think this through concretely rather than picking the middle option. A two thirds quorum in a company with two equal shareholders means neither can meet without the other, which may be exactly what you want or may be a deadlock waiting to happen.
- The name of the Company?
- The registered name of the company, exactly as it appears on the certificate of incorporation. These articles form part of the company's constitution, so the name must match the register.
- In which country was the company incorporated?
- Where the company is registered, for example Nigeria. It determines which companies legislation governs, which for a Nigerian company is the Companies and Allied Matters Act 2020.
- In which month of the year will the shareholders annual meeting be held?
- The month of the annual general meeting. CAMA requires most companies to hold one, with exemptions for small and single member companies. Fixing a month gives the meeting a rhythm and makes it harder to skip.
- The number of shareholders present at a meeting that would represent a quorum?
- How many shareholders must attend for a meeting to be valid. Too low lets a minority decide without the others; too high lets one absentee paralyse the company. With two or three shareholders, work through the arithmetic before choosing.
- Simple Majority
- If you chose simple majority, describe how it is calculated, whether by number of shareholders or by shareholding. Those produce very different results where one person holds most of the shares.
- One-third
- If you chose one third, set out what that means in practice for your shareholder numbers. A low quorum makes meetings easy to hold, which suits companies with many passive shareholders and suits nobody in a company of two.
- Two-third
- If you chose two thirds, note that it gives significant blocking power to any shareholder whose absence prevents the threshold being met. In a small company that can amount to a veto by non attendance.
- Additional business to be discussed during the shareholders meeting asides the statutory order of business
- Anything the company wants on the agenda beyond the statutory items such as accounts, auditors and director appointments. Examples include reviewing a strategic plan or approving a dividend policy.
Step 2 of 2
Articles of Association/ Corporate Bylaws
Directors, board meetings and the financial year
This step governs the board and the company's record keeping.
On director numbers, CAMA requires a minimum of two directors for most companies, with an exception for small companies which may have one. Setting a range rather than a fixed figure gives room to appoint somebody without amending the articles.
Board quorum matters for the same reasons shareholder quorum does, and in a two director company it is worth thinking about carefully: requiring both means neither can act alone, which prevents unilateral decisions and also prevents anything happening when one is unavailable.
The resignation mechanism should be simple and written. Disputes about whether a director resigned, and when, are surprisingly common, and a clause requiring written notice to the company resolves them.
The financial year end is not a formality. It sets the reporting cycle, the audit timetable and the annual return deadline, and changing it later is an administrative exercise. Most Nigerian companies choose December, which aligns with the tax year and is what accountants expect.
Minutes must be kept. CAMA requires companies to maintain records of meetings, and articles that state a retention period turn a legal obligation into an actual practice.
- Number of directors?
- How many directors the company will have. CAMA requires a minimum of two for most companies, with small companies permitted a single director. Expressing it as a range avoids amending the articles each time the board changes.
- The amount of time the director will remain in office?
- The term a director serves before reappointment, for example one year. A defined term forces a periodic decision about the board, which is healthy in a company with outside shareholders.
- The number of directors that would represent a quorum in a board meeting?
- How many directors must attend for a board meeting to be valid. In a two director company requiring both prevents unilateral decisions and also stops business when one is away, so choose deliberately.
- Describe how a director may voluntarily resign?
- The resignation mechanism, usually written notice to the company. Disputes about whether and when somebody resigned are common, and a clear written process settles them.
- The title of the person who presides over the board meetings
- Who chairs, usually the Chairman or the Managing Director. Consider stating whether the chair has a casting vote, which is what breaks a deadlock on an evenly split board.
- For how long will the minutes of meeting be stored?
- The retention period for meeting records. CAMA requires companies to keep records of meetings, and setting a period here turns that obligation into a practice somebody actually follows.
- What month shall be the end of the company's financial year?
- The financial year end, commonly December in Nigeria. It sets the reporting cycle, the audit timetable and the annual return deadline, and changing it later is an administrative exercise.
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File with the CAC
For a Nigerian company the articles are filed as part of incorporation. Amending them later requires a resolution and a filing, so it is worth getting right at the outset.
Compare against the model articles
CAMA supplies model articles that apply by default. Know which of your provisions differ from them, because those are the ones doing actual work.
Add a shareholders agreement
Articles are public and govern the company. A shareholders agreement is private and governs the relationship between owners, covering the things articles do not.
Actually hold the meetings
Articles setting an annual meeting month and a minutes retention period are worth nothing if no meeting happens. The record is what proves the company was properly run.
Questions people ask
What are articles of association?
The internal rulebook of a company, governing meetings, quorum, directors, tenure and the financial year. In American usage the same document is called corporate bylaws.
Does a Nigerian company need its own articles?
CAMA provides model articles that apply by default, so a company can adopt them. Writing your own makes sense where the statutory defaults do not suit your shareholder structure.
How many directors must a Nigerian company have?
CAMA requires a minimum of two for most companies, with small companies permitted to have a single director. Expressing the number as a range avoids amending the articles every time the board changes.
What quorum should I set?
One that reflects your actual shareholder numbers. Too low lets a minority decide without the others, and too high lets a single absentee block everything, which in a two shareholder company is a real risk.
When should the financial year end?
December is the common Nigerian choice because it aligns with the tax year and is what accountants and auditors expect. Changing it later is possible but administratively tedious.
What is the difference between articles and a shareholders agreement?
Articles are part of the company's public constitution and govern the company. A shareholders agreement is private and governs the relationship between the owners themselves.
Documents that go with this
Terms used on this page
Articles of Association
The articles of association are the internal rulebook of a company. They set out how decisions get made, how shares move, and what powers directors have.
Memorandum of Association
The memorandum of association is the founding document of a company, stating its name, its objects and its share capital. Together with the articles it forms what Nigerians call MEMART.
Quorum
A quorum is the minimum number of people who must be present for a meeting to make valid decisions. Without it, whatever the meeting decides can be challenged and set aside.
Director
A director is a person appointed to manage a company and make decisions on its behalf. The role comes with legal duties owed to the company, and with personal exposure when those duties are ignored.
Board of Directors
The board is the body that manages the company. It acts collectively through meetings and resolutions, and a decision that was never minuted is difficult to prove was ever taken.
Annual General Meeting
An annual general meeting is the yearly meeting where shareholders receive the accounts, appoint directors and auditors and ask questions. CAMA 2020 exempted small and single shareholder companies from holding one.
Company Secretary
A company secretary is the officer responsible for a company's statutory records and filings. They keep the registers, prepare the board papers, and make sure the company stays current at the CAC.
Annual Return
An annual return is the yearly filing every registered Nigerian business makes to the Corporate Affairs Commission confirming who runs it and where it operates. Skip it long enough and the CAC can treat your company as inactive.
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