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jyoti g gurnani

jyoti g gurnani (Querist)

01 December 2013 diff between article of association and memorandam of association

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

01 December 2013 Memorandum and articles are public documents. They are inter-linked and require to be registered for the formation of a company. Where there is any ambiguity or where the memorandum is silent on any point, the articles may serve to explain or supplement the memorandum. Beyond this, the two documents have nothing in common and differ from one another in the following respects:

1. Memorandum of association is the charter of the company and defines the scope of its activities. Articles of association of the company is a document which regulates the internal management of the company. These are the rules made by the company for carrying out the objects of the company as set out in the memorandum.

2. Memorandum of association defines the relation of the company with the rights of the members of the company interest and also establishes the relationship of the company with the members.

3. Memorandum of association cannot be altered except in the manner and to the extent provided by the act, whereas the articles being only the byelaws of the company can be altered by a special resolution.

4. Memorandum is a supreme document of the company whereas articles are subordinate to the memorandum. They cannot alter or control the memorandum.

5. Every company must have its own memorandum. But a company limited by shares need not register its articles. In such a case table A applies.

6. A company cannot depart from the provisions contained in its memorandum, and if it does, it would be ultra-vires the company. Anything done against the provisions of articles, but which is intra-vires the memorandum, can be ratified.

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