This article will help you to learn about the difference between memorandum and articles of association of a company.
Difference between Memorandum and Articles of Association
Memorandum
Difference – 1. Subject Matter:
It is the charter of the company which defines its objects and powers.
Difference – 2. Importance:
Every company must have its own memorandum of Association. It is a must for getting a company registered.
Difference – 3. Relationship:
It defines the relationship between the company and the outsiders.
Difference – 4. Provisions:
The M/A of a company cannot contain anything contrary to the companies Act.
Difference – 5. Registration:
A new company must prepare its memorandum and file it with the Registrar before the Registration of the company is affected.
Difference – 6. Limitation:
A company cannot engage in any activity which is beyond the scope of memorandum. Any action beyond the scope of memorandum will be void.
Difference – 7. Alteration:
The Memorandum of Association cannot be altered easily because it is the charter of the company. Important clause like the ‘Situation clause’ and’ Objects clause’ can be changed only when confirmed by the Court.
Articles of Association
Difference – 1. Subject Matter:
Articles are the bye laws of the company for the conduct of internal administrations.
Difference – 2. Importance:
A company limited by shares need not have articles of its own.
Difference – 3. Relationship:
It defines the relationship between the company and its members and among members themselves.
Difference – 4. Provisions:
The Articles of association of a company are subordinate to the Memorandum of Association and Companies Act and cannot contain anything contrary to both.
Difference – 5. Registration:
The Articles are not required to be filed for the purpose of registration.
Difference – 6. Limitation:
Any activity done beyond the scope of Articles of Association will not be void and it can be ratified by passing a special resolution.
Difference – 7. Alteration:
Alteration of Articles is not difficult. It can be altered by a special resolution and the sanction either from the court or Government is not necessary.