Memorandum of Association vs. Articles of Association: Know the Difference
By Shumaila Saeed || Updated on December 25, 2023
The Memorandum of Association defines a company's structure and purpose, while the Articles of Association outline the rules for its internal management and operation.
Key Differences
The Memorandum of Association is a legal document that outlines the scope of a company's operations and its relationship with the outside world. The Articles of Association detail the company's internal governance, including the rights of shareholders and the duties of directors.
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Dec 19, 2023
In the Memorandum of Association, key elements like the company's name, objectives, liability, and share capital are specified. The Articles of Association define how decisions are made, how shares are issued, and how the company's meetings are conducted.
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Dec 19, 2023
Changes to the Memorandum of Association typically require a legal process and shareholders' approval, indicating its fundamental nature. The Articles of Association can be more easily amended, reflecting its role in managing the company's day-to-day operations.
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Dec 19, 2023
The Memorandum of Association is essential for the incorporation of a company and serves as a charter. In contrast, the Articles of Association function like a manual for the company's internal administration and procedures.
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While the Memorandum of Association establishes the company's relationship with the external environment (such as its business scope), the Articles of Association manage internal affairs, detailing the roles and responsibilities within the company.
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Dec 19, 2023
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Comparison Chart
Purpose
Defines company's structure, scope, and relationship with external world
Outlines rules for internal management and operation
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Dec 19, 2023
Key Elements
Company name, objectives, liability, share capital
Decision-making processes, shareholder rights, director duties
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Dec 19, 2023
Ease of Amendment
Difficult to amend, requires legal process and shareholder approval
Relatively easier to amend
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Role in Company Formation
Essential for incorporation, serves as a charter
Acts as a manual for internal administration
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Focus
External relations and scope of operations
Internal governance and operational procedures
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Dec 19, 2023
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Memorandum of Association and Articles of Association Definitions
Memorandum of Association
A foundational document for company incorporation.
To register our company, we first drafted the Memorandum of Association.
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Articles of Association
Guidelines for company management and decision-making.
According to our Articles of Association, the CEO has specific responsibilities.
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Dec 12, 2023
Memorandum of Association
A legal document stating a company's objectives and scope.
The Memorandum of Association specifies the conditions upon which the company is granted incorporation.
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Dec 12, 2023
Articles of Association
Document outlining shareholder and director rights.
Our Articles of Association define the voting rights of shareholders.
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Memorandum of Association
Defines the limits of a company’s operations.
Our Memorandum of Association ensures we operate within our agreed business scope.
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Articles of Association
Legal document detailing a company’s administrative structure.
The Articles of Association specify the roles of our executive team.
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Dec 12, 2023
Memorandum of Association
A charter outlining a company’s relationship with shareholders.
The Memorandum of Association includes details about share capital and liability.
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Dec 12, 2023
Articles of Association
Sets the framework for issuing shares and dividends.
The process for dividend distribution is stated in the Articles of Association.
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Dec 12, 2023
Memorandum of Association
Establishes a company’s structure for legal purposes.
A company's legal identity is outlined in its Memorandum of Association.
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Dec 12, 2023
Articles of Association
Internal rules governing a company’s operations.
The Articles of Association detail our company's board meeting procedures.
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Dec 12, 2023
Repeatedly Asked Queries
Who needs a Memorandum of Association?
Every company that is being legally incorporated requires one.
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Dec 19, 2023
Can Articles of Association be changed?
Yes, they can be amended by a company's shareholders or board.
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Dec 19, 2023
What is the Memorandum of Association?
It's a legal document defining a company's objectives and structure.
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Dec 19, 2023
What are Articles of Association?
These are internal rules that govern a company’s management and operations.
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Dec 19, 2023
Is the Memorandum of Association public?
Yes, it's a public document filed with the company's registration.
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Dec 19, 2023
Is a Memorandum of Association legally binding?
Yes, it's a legal document that binds the company to its stated objectives.
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Dec 19, 2023
How often are Articles of Association updated?
They can be updated as needed, usually when operational changes occur.
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Dec 19, 2023
Who enforces the Articles of Association?
The company's board and management enforce these internal rules.
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Do all companies have Articles of Association?
Yes, it's a standard requirement for all incorporated companies.
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Dec 19, 2023
What's included in a Memorandum of Association?
It includes the company name, objectives, liability, and capital structure.
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What details are in Articles of Association?
They contain details on governance, shareholder rights, and director duties.
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Dec 19, 2023
Can a company operate without a Memorandum of Association?
No, it's a legal requirement for company incorporation.
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Dec 19, 2023
Are Articles of Association the same for every company?
No, they are tailored to each company's specific operational needs.
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Dec 19, 2023
Are changes to the Memorandum of Association common?
Changes are uncommon and require a legal process and approval.
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Dec 19, 2023
Can Articles of Association override the Memorandum?
No, the Memorandum takes precedence over the Articles.
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Dec 19, 2023
Do Articles of Association affect everyday business operations?
Yes, they significantly influence how a company is run on a daily basis.
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Does the Memorandum of Association define share classes?
Yes, it includes details about the types and classes of shares.
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Do Articles of Association cover dispute resolution?
Yes, they often include procedures for handling internal disputes.
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Who drafts the Memorandum of Association?
It's usually drafted by the company's founders or legal representatives.
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Is the Memorandum of Association important for investors?
Yes, it provides essential information about the company's scope and structure.
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Dec 19, 2023
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About Author
Written by
Shumaila SaeedShumaila Saeed, an expert content creator with 6 years of experience, specializes in distilling complex topics into easily digestible comparisons, shining a light on the nuances that both inform and educate readers with clarity and accuracy.
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