Memorandum of Association vs. Articles of Association

Difference Between Memorandum of Association and Articles of Association

The Memorandum of Association and Articles of Association are important documents which help in knowing about a company. These documents also make the constitution of a company. Although there are some similarities, the two serve different functions and goals and are important for different class of people with an interest in the performance of the company. This article attempts to explore these differences for the benefit of readers.

Articles of Association

Articles of Association’ is considered to an internal document of a company and people usually call it just articles. These are the rules governing an organization and are generally filed with registrar of Companies. The fundamental features of articles of association are given below:

• Structure of the organization with the control mechanism

• Pattern of Voting and employee rights

• Mode of action of meetings of director

  • Mode of action of AGM to shareholders
  • The difference in the rights of different kinds of shares

Memorandum of Association

The Memorandum of Association is a binding document for any organization that must be filed with the registrar of companies, which reflects the association of the company with outside world. Important features of a Memorandum of Association are as follows.

•Name, address and the office of the company that was registered with the registrar

• the way the capital share of the company is structured

• Goals and objectives of the company

What is the difference between the Memorandum of Association and Articles?

The Memorandum of Association is also called the charter of an organization and is a useful document for investors to know how this money is invested and used by the company. On the other hand, the articles are important as it allows one to get a peek into the inner structure of the company and how the power flows down. It informs about the laws governing the internal administration of the company. It also reflects the roles, responsibilities and functions of different people in the administration of the company.

 

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