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Why is Articles of Association also …

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Why is Articles of Association also called as Doctrine of Indoor Management ?
  • 1 answers

Anjan Kumar Samal. 8 years, 4 months ago

The AoA defines the duties and powers of the Board of Directors, individuals roles and responsibilities of the directors and how the business is to be carried on. Other important contents are the classes of shares, procedure for issue and transfer of share certificates, voting rights of members and their borrowing power.

The doctrine helps protect external members from the company and states that the people are entitled to presume that internal proceedings are as per documents submitted with the Registrar of Companies.

The doctrine of indoor management evolved around 150 years ago in the context of the doctrine of constructive notice. The role of doctrine of indoor management is opposed to of the role of doctrine of constructive notice. 

Whereas the doctrine of constructive notice protects a company against outsiders, the doctrine of indoor management protects outsiders against the actions of a company. This doctrine also is a possible safeguard against the possibility of abusing the doctrine of constructive notice.

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