Both the Memorandum of Association and
the Articles of Association are very important documents for any type of
company be it a public-limited company or a private-limited company. For a
company, a Memorandum is the constitution of the charter of the company. In
other words, a Memorandum defines and confines the power of the company. As for
the Articles of Association, they are the by-laws of the company that give an
explanation to the Memorandum. While the Memorandum regulates the interaction
of the company with the external world, the Articles of Association are
responsible for the internal conduct of the company. Also registration of the
Memorandum is compulsory for every company. On the other hand, registration of
Articles of Association is not compulsory for a company that is limited by
shares. Such a company may adopt Table A in place of Articles of Association.
In addition to that, a Memorandum is sub-ordinate to only the Company’s
ordinance 1984 while the Articles of Association are sub-ordinate to both the
Memorandum and the Articles of Association.
the Articles of Association are very important documents for any type of
company be it a public-limited company or a private-limited company. For a
company, a Memorandum is the constitution of the charter of the company. In
other words, a Memorandum defines and confines the power of the company. As for
the Articles of Association, they are the by-laws of the company that give an
explanation to the Memorandum. While the Memorandum regulates the interaction
of the company with the external world, the Articles of Association are
responsible for the internal conduct of the company. Also registration of the
Memorandum is compulsory for every company. On the other hand, registration of
Articles of Association is not compulsory for a company that is limited by
shares. Such a company may adopt Table A in place of Articles of Association.
In addition to that, a Memorandum is sub-ordinate to only the Company’s
ordinance 1984 while the Articles of Association are sub-ordinate to both the
Memorandum and the Articles of Association.
The Memorandum of Association sets out the
company’s name, where its registered office is situated (which must be in
England and Wales), the fact that the liability of members is limited, its
share capital and the purpose for which the company is set up (its objects and
its powers).
The
Articles of Association of the company are the internal rules
of the company. They create a contract between the members or owners of the
company and the company itself. If no Articles of Association are filed when
the company is incorporated a statutory standard form of articles will apply.
In practice, the statutory articles are amended to suit a company’s specific
requirements. The Articles deal with such matters as the creation, issue,
allotment and transfer of shares, the company’s borrowing limits and the powers
and duties and regulations of directors.
Articles of Association of the company are the internal rules
of the company. They create a contract between the members or owners of the
company and the company itself. If no Articles of Association are filed when
the company is incorporated a statutory standard form of articles will apply.
In practice, the statutory articles are amended to suit a company’s specific
requirements. The Articles deal with such matters as the creation, issue,
allotment and transfer of shares, the company’s borrowing limits and the powers
and duties and regulations of directors.
With effect from 1 October 2009, the
Companies Act 2006 will introduce major changes to these
documents. As a result of the changes the importance of the
Memorandum of Association will be greatly reduced. This document will be little
more than confirmation of the fact that the initial shareholders wish to form
the company and that they have consequently agreed to become members of that
company. Revised model forms of Articles of Association will also be introduced
which, for private companies in particular, will be much simpler than the
existing model form to reflect the simplified legislative framework introduced
by the Companies Act 2006.
Companies Act 2006 will introduce major changes to these
documents. As a result of the changes the importance of the
Memorandum of Association will be greatly reduced. This document will be little
more than confirmation of the fact that the initial shareholders wish to form
the company and that they have consequently agreed to become members of that
company. Revised model forms of Articles of Association will also be introduced
which, for private companies in particular, will be much simpler than the
existing model form to reflect the simplified legislative framework introduced
by the Companies Act 2006.
Relevance
·
Is
the constitution of the company in its relation to outside world.
Is
the constitution of the company in its relation to outside world.
·
Are
the regulations which govern the internal affairs of the company.
Are
the regulations which govern the internal affairs of the company.
·
Lays
down among other things, the object of the company.
Lays
down among other things, the object of the company.
·
Provide
the manner or mode in which the objects are to be carried out.
Provide
the manner or mode in which the objects are to be carried out.
·
Is
the fundamental document of the company.
Is
the fundamental document of the company.
·
Plays
a part subsidiary to MOA.
Plays
a part subsidiary to MOA.
·
Can
be altered only in accordance with provisions of Companies Ordinance, 1984.
Can
be altered only in accordance with provisions of Companies Ordinance, 1984.
·
Can
be altered by special resolution at anytime but according to Memorandum of
association (MOA) and Ordinance.
Can
be altered by special resolution at anytime but according to Memorandum of
association (MOA) and Ordinance.
The
memorandum is in the nature of a contact between the company and outside world
dealing with it: therefore, a person dealing with companies supposed to know
the provisions of its memorandum.
memorandum is in the nature of a contact between the company and outside world
dealing with it: therefore, a person dealing with companies supposed to know
the provisions of its memorandum.
The
articles, however, do not create a contract between the company and outsiders.
Though, a person dealing with the company is supposed to Know he provisions of
its articles, yet if there is breach of those Provisions, he is not effected
thereby provided the matter was within the power of the company as defined in
its Memorandum of association (MOA) and he had no notice of the breach. Memorandum
of association (MOA) is always required to be registered.
articles, however, do not create a contract between the company and outsiders.
Though, a person dealing with the company is supposed to Know he provisions of
its articles, yet if there is breach of those Provisions, he is not effected
thereby provided the matter was within the power of the company as defined in
its Memorandum of association (MOA) and he had no notice of the breach. Memorandum
of association (MOA) is always required to be registered.
