Company law and accounting principles dictate specific provisions governing a company's capacity to receive advance payments on shares. The primary instrument conferring this authority is the Articles of Association. The rationale is as follows:
- Articles of Association: This foundational document delineates the powers vested in the company's management. It details the protocols and prerequisites for accepting and approving advance calls, specifying the company's authority to solicit such payments.
- Shareholders: As company owners, shareholders do not possess inherent authority to approve advance calls unless explicitly granted by the Articles of Association.
- Board of Directors: While responsible for operational oversight, the Board's decisions, including those concerning advance calls, must conform to the Articles of Association and cannot override its provisions.
- Memorandum of Association: Primarily concerned with the company's fundamental purpose and scope, this document generally does not address procedural matters such as advance calls.
Consequently, the authority for accepting calls in advance is definitively established within the Articles of Association.