Difference between Memorandum and Articles of Association`
Basis Memorandum Articles
1. Purpose Lays down the charter of the company Provides the rules and regulations for the internal administration of the company
2. Scope States the objects and powers of the company States the way to achieve the objectives stated in the Memorandum of Association
3. Status It is the basic document of the company It is the supplementary document or secondary document of the company.
4. Relationship It defines the relationship of the company with outside world It mainly guides the relationship between the company and its shareholders.
5. Whether Compulsory or not Memorandum of Association is compulsory document. Every company should have its Memorandum of Association A public limited company can opt for the model set of Articles given as Table A of the Companies Act. They need not have separate Articles of Association.
6. Legal effect Acts done beyond the scope of memorandum are void, or the company cannot ratify such acts Acts done beyond the scope the Articles can be ratified
7. Alteration Alteration of Memorandum is a lengthy process Alteration of Articles of Association is relatively easier
Memorandum of association is the fundamental charter under this all the information feed like name of the company, location of the company,object of the company etc. But the articles of association is the constitution of the company under this all the rules & regulation are noted those are for internal management....if you satisfy with this
What are the Memorandum and 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.
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.
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.
Memorandum of Association is the constitution of the charter of the company that defines and confines the power of the company. And the Articles of Association are the by-laws of the company which give an explanation to the Memorandum. See the link for more information: www.blurtit.com
The memorandum of association lists the name if the company, the location it is established/registered and the objectives of the company where as the articles of association define the terms used, the operating principles and legal guidelines of running the organization. Terms such as "Directors of the Company", "Capital", Dividend comprises of what? All these are explained in the Articles and not in the memorandum.
Memorandum of association this are document produced by the promoter of a firm or a company.It contain what is generally called 'external' rules of the company.They are objective of the company and how to relate to the public. Articles of association is a document in which the internal regulation of a limited liability company are outline
The articles of association are the regulations governing the relationships between the shareholders and directors of a company. Whereas the memorandum of association of a company is a document which governs the relationship between the company and the outside world.