11 Difference between Memorandum of Association and Articles of Association

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

1. Condition

• 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.

2. Power

• 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.

3. Contract

• 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.

4. Objectives

• 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.

5. Provision

• 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.

6. Alternation

• 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.

7. Relation

• The memorandum limits the area beyond which articles cannot go.
• In this sense, articles are subsidiary to the memorandum.

8. Validity

• 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.

10. Registration

• The memorandum must be registered at the time of incorporation.
• The articles may or may not be registered.

11. Scope

• 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:

• Memorandum of Association and Articles of Association