Chapter Two: THE MEMORUNDAM AND ARTICLES

OF ASSOCIATION
 DEFINITOIN OF MEMORANDUM OF ASSOCIATION
The Memorandum contains rules regarding the capital structure, the liability of the members,
the object of the company and all other important matters relating to the company.
According to Sen and Mitra:

 DEFINITOIN OF ARTICLES OF ASSOCIATION

The Articles of Association is a document which contains rules, regulation and by-laws regarding
the internal management of the company.

 THE FORM AND CONTENTS OF THE MEMORANDUM

The Company Act lays down that the memorandum of association of every company shall
contain the following particulars:
1. Name Clause: The name of the company with the word ‘limited’ at the end a public
company and the words ‘private limited’ at the end of the name of a private company.
2. Situation Clause: The name of the state in where the company is to be situated.
3. Objects Clause: Memorandum must state separately the main objects.
4. Area of Operation Clause: Except in the case of trading corporations, the state or states to
whose territories the objects contents.
5. Liability Clause: The nature of the liability if the members whether limited by shares or by
guarantee or unlimited.
6. Capital Clause: The memorandum shall state the amount of share capital and the division
thereof into shares of a fixed amount.
7. The Association and Subscription Clause: No subscriber to the memo shall take less than
one shares, and each subscriber to the memo shall write opposite to his name the number
of shares he takes.

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 Lord Macmillan says:

 THE FORM AND CONTENTS OF ARTICELS

The Company Act lays down that the articles of association of every company shall contain the
following particulars:
1. Rules: The Articles of Association contains rules, regulation and bye-laws regarding the
internal management of the company.
2. Form of Articles: The articles shall be printed, be divided into paragraphs numbered and be
signed by each subscriber of the memorandum of association.
3. Contents of Articles: Articles usually contains provisions in respect of the matters: share
capital, rights of shareholders, payment of commission, share certificate, lien of shares, calls
on shares, alteration of capital, general meeting and voting rights of members etc.
4. Interpretation: The Articles of Association are commercial documents and they should not
be interpreted very strictly.

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 DIFFERENCES BETWEEN MEMORANDUM AND ARTICLES OF ASSOCIATION
The main differences between Memorandum and Articles of Association are given below:
Points Memorandum of Association Articles of Association
1. Document It is the fundamental document. It is the subsidiary document.
2. Type Memo is the boss of Articles. Articles are the subordinate of Memo.
3. Control Memorandum cannot be controlled Articles can be controlled by
by the Articles. Memorandum.
4. Alter After the adoption of certain Articles can be altered easily.
formalities, memo can be altered.
5. Affairs It dictates external and internal It dictates internal affairs and
affairs of the company management of the company
6. Effect It has effects on the members as well It has effects on the members and
as the outsiders. employees of company.