The Memorandum and Articles of Association is a legal document drawn up by a lawyer, which is required in the course of the incorporation of an organization. This document is made up of two constituent parts – the Memorandum of Association and the Articles of Association. The next is a transient description of this document and the contents of its two constituent parts.
The Memorandum of Association of an organization is the document which governs the connection between that company and the remaining of the world. The document is designed to speak to the general public the corporate’s state of affairs, in addition to its purpose of being and operating. This allows company stakeholders akin to creditors, suppliers and shareholders to guage the extent of their risk, in addition to the probabilities of the corporate with the ability to overcome them in the longer term.
This document is required to state the name and kind of the corporate, its objectives, authorized share capital and its original shareholders. The objects of the corporate include information akin to what an organization is permitted to do – which due to this fact limits the corporate’s capability to act. The Memorandum acknowledges where the corporate is duly registered, and typically includes clauses on the property and sources of income of the corporate. The Memorandum of Association should be witnessed then notarized a notary public.
The Articles of Association of an organization are the foundations governing the connection between the administrators and shareholders of the corporate. Along with the Memorandum of Association, the Articles of Association constitute the structure of an organization.
The Articles of Association provide for the several voting and dividend rights attached to different share classes, in addition to restrictions on the transfer of shares. These further include a preliminary clause with word definitions provided in order to stop ambiguity during interpretation. This document also defines the corporate and provides for its members; it provides guidelines for the resignation and termination of directors by the Board; it also includes rules on holding annual and extraordinary general meetings, with regard to quorum, notices of meetings, proceedings and voting. It also indicates the utmost and minimum variety of directors the corporate will need to have and the way they might be disqualified; it provides for the inclusion of alternate directors, the powers and duties of directors and their interests and proceedings at Board meetings. The Articles of Association also include provisions for the CEO and Company Secretary, and details clauses referring to the corporate seal, auditing and accounting, winding up and indemnity.
