The Difference Between Memorandum of Association and Article of Association
When you start a company, you need to create certain legal documents to define the structure and operations of your business. Two of the most important documents are the Memorandum of Association and the Article of Association.
What is the Memorandum of Association?
The Memorandum of Association is a legal document that sets out the company’s objectives and powers, and the relationship between the company and its shareholders. It contains the following information:
– The company’s name and registered office address
– The company’s objectives and goals
– The amount of share capital the company is authorized to issue
– The types of shares the company can issue and their rights
– The names and addresses of the company’s subscribers (the people who have agreed to form the company)
The Memorandum of Association is a crucial document as it gives the company its legal identity. It is a public document and can be viewed by anyone who wishes to see it.
What is the Article of Association?
The Article of Association is a document that sets out how the company will be run, and the rights and duties of its directors and shareholders. It contains the following information:
– The rules and procedures for running the company
– The powers and duties of the directors and shareholders
– The rights and restrictions of each class of shares
– The procedures for issuing and transferring shares
– The procedures for holding and conducting meetings
– The procedures for amending the Articles
The Article of Association is a private document and is only available to the members of the company.
The Differences
While the Memorandum of Association outlines the company’s objectives and powers, the Article of Association defines the way the company will be run. The Memorandum is a public document, while the Article is a private document that is only available to the members of the company.
The Memorandum of Association cannot be amended after the company has been formed, unless it is for a change in the company’s name, location, or objectives. The Article of Association, on the other hand, can be amended by the company’s directors and shareholders, but only if a special resolution is passed.
In conclusion, the Memorandum of Association and the Article of Association are two essential legal documents that define the structure and operation of a company. Both documents serve different purposes, but together they provide the legal framework for the company’s growth and success.
Table difference between memorandum of association and article of association
| Memorandum of Association | Article of Association |
|---|---|
| The memorandum of association is a legal document that contains the company’s name, objectives, registered office, and authorized share capital. | The article of association is a legal document that specifies the internal rules and regulations of the company, including the appointment of directors, share transfer, meetings, and other governance matters. |
| The memorandum of association cannot be altered easily, and any change in the company’s objectives or authorized share capital requires a special resolution of the shareholders. | The article of association can be altered easily by passing an ordinary resolution of the shareholders or by the board of directors. |
| The memorandum of association is required to be filed with the registrar of companies during the incorporation process. | The article of association is filed with the registrar of companies as part of the incorporation process or can be amended later and filed as required. |