The following are the points of difference between memorandum of association and articles of association of a company:
Difference between memorandum of association and articles of association
- The memorandum contains the conditions upon which alone the company is granted incorporation. These conditions are fundamental and unalterable.
- The articles are the internal regulations of the company and over these, the members have full control and they can be easily altered.
- The memorandum cannot give the company the power to do anything contrary to the provision of the company’s act.
- The articles are not only limited by the act, but they are also subsidiary to the memorandum and cannot exceed the powers contained therein.
- The memorandum is in the nature of a contract between the company and the outsider dealing with it.
- The articles do not create a contract between the company and the outsiders.
- The memorandum contains the objectives and powers of the company.
- The articles provide the regulations by which those objectives and powers are to be carried into effect.
- A person dealing with a company is supposed to know the provisions of its memorandum.
- A person dealing with a company is supposed to know the provision of its articles if there is a breach of those provisions.
- The memorandum cannot be altered except as regards certain specified particulars and in accordance with the provisions of the law.
- The articles can be altered by a special resolution at any time.
- The memorandum limits the area beyond which articles cannot go.
- In this sense, articles are subsidiary to the memorandum.
- The memorandum is the dominant instrument and controls articles.
- Any provision, contrary to the memorandum of association, is invalid.
9. Deed of the company
- Every company must have its memorandum of association.
- A company limited by shares may have its own articles of association.
- The memorandum must be registered at the time of incorporation.
- The articles may or may not be registered.
- The Memorandum is the charter, which defines and confines the powers and limitations of the company.
- The articles indicate the duties, rights, and powers of members, who are entrusted with the responsibility of running the administration and management.
Other Content of Articles of Association: