Memorandum and article of association

The most important document in the constitution of a company is the Memorandum of Association of the company. The Articles of Association is the second most important document that needs to be registered by any company for its incorporation, registration and subsequent operation. It is a public document laying down the rules for the internal management of the company and it does not have the force of ‘law’. To set up as a limited company, they need to have a memorandum of association, which sets out what the company has been formed to do and another important is a article of association, which are internal rules over including what the director can do and voting rights of the shareholders. Memorandum of association is legal document records the key characteristics and the external activity of the company being created. Memorandum will provide basic information on the objectives of the business and records the share capital initially required. And article of association is the document specifies how the company will be organized or regulated internally. It explains the initial organization of the executives of the company, with their titles, their area of responsibility, CEO of company, finance director and etc. it also mentions the rights and duties of shareholders.

the memorandum and articles of association are public documents and therefore open to public. But, the details of internal procedures are not thus open to public inspection. Hence, an foreigner may be expected to know the constitution and other essential details of the company; but not those actions which may or may take place within the closed doors.

The subscribers to the memorandum of association are also the signatories to the articles and are given a free hand to decide and determine its contents. This is to ensure that maximum flexibility is granted to