Which document sets out the internal organization and rules of a limited company, including powers of directors and voting rules?

Prepare for the IB Business and Management SL Exam with flashcards and multiple-choice questions. Each question includes hints and explanations to boost your confidence and success.

Multiple Choice

Which document sets out the internal organization and rules of a limited company, including powers of directors and voting rules?

Explanation:
The governance rules of a limited company are defined in the Articles of Association. This document sets how the company is run from the inside: who can be a director, how directors are appointed and removed, what powers they have, and how decisions are made, including the rules for voting at board and shareholder meetings. It acts as the company’s constitution, guiding day-to-day management and relationships with shareholders. By contrast, a Deed of Partnership is used for partnerships, not limited companies, and certificates of confirmation or charitable structures are unrelated to a company’s internal governance.

The governance rules of a limited company are defined in the Articles of Association. This document sets how the company is run from the inside: who can be a director, how directors are appointed and removed, what powers they have, and how decisions are made, including the rules for voting at board and shareholder meetings. It acts as the company’s constitution, guiding day-to-day management and relationships with shareholders. By contrast, a Deed of Partnership is used for partnerships, not limited companies, and certificates of confirmation or charitable structures are unrelated to a company’s internal governance.

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