Memorandum and Articles of Association
The Memorandum of Association is a document that sets out the company's name, its registered office, and its objects. It is a legal document that defines the relationship between the company and the outside world, and it is filed with the government when the company is incorporated.
The Articles of Association, on the other hand, are the internal rules that govern the management and administration of the company. They set out how the company will be run, including details on the duties and responsibilities of directors and the procedures for holding meetings and making decisions.
In summary, the Memorandum of Association is a document that outlines the company's purpose and external relations, while the Articles of Association are the internal rules that govern the company's operations.
The Memorandum of Association of a company typically includes the following elements:
- The company's name: The name of the company must be unique and must not be similar to any existing company's name.
- The company's registered office: The address of the company's registered office must be stated in the Memorandum.
- The company's objects: The objects of the company refer to the business activities that the company is authorized to carry out. The objects are usually divided into two categories: main objects and ancillary objects. The main objects are the primary business activities of the company, while the ancillary objects are activities that are incidental or supplementary to the main objects.
- The company's liability: The Memorandum must specify whether the company is a limited liability company or an unlimited liability company. In a limited liability company, the liability of the shareholders is limited to the amount of capital they have invested in the company. In an unlimited liability company, the shareholders are personally liable for the debts of the company.
- The company's share capital: The Memorandum must specify the authorized share capital of the company and the number and class of shares into which it is divided.
- The company's subscribers: The subscribers are the people who sign the Memorandum and agree to become members of the company. The Memorandum must list the names, addresses, and occupations of the subscribers.
- The association clause: The association clause states that the subscribers agree to form a company and to become members of the company.
- The witness clause: The witness clause states that the Memorandum has been signed by the subscribers in the presence of witnesses. The names and addresses of the witnesses must be listed in the clause.
The Articles of Association of a company typically include the following elements:
- The company's name: The Articles must state the company's name, which must be the same as the name stated in the Memorandum of Association.
- The company's registered office: The Articles must state the address of the company's registered office, which must be the same as the address stated in the Memorandum of Association.
- The company's objects: The Articles may include a statement of the company's objects, which must be the same as the objects stated in the Memorandum of Association.
- The company's share capital: The Articles may include a statement of the company's authorized share capital and the number and class of shares into which it is divided.
- The rights and powers of the shareholders: The Articles must specify the rights and powers of the shareholders, such as the right to vote at meetings and the right to receive dividends.
- The duties and responsibilities of the directors: The Articles must specify the duties and responsibilities of the directors, such as the duty to act in the best interests of the company and the duty to exercise due care, skill, and diligence.
- The procedures for holding meetings and making decisions: The Articles must specify the procedures for convening and conducting meetings of the shareholders and the directors, and for making decisions. This may include details on the notice periods required for meetings, the quorum needed for meetings to be valid, and the voting procedures.
- The company's seal: The Articles may specify the use and custody of the company's seal, which is a physical stamp that is used to authenticate documents on behalf of the company.
- The alteration of the Articles: The Articles must specify the procedures for altering the Articles, which may involve the approval of the shareholders and/or the directors.
- The dissolution of the company: The Articles may specify the circumstances under which the company may be dissolved and the procedures for conducting the dissolution.
