Memorandum of Association and Articles of Association are basically charter documents that are needed in order to set up a company and govern its operations.
Company Memorandum of Association
The company memorandum of association is the most fundamental document of the company and it can be regard as the company constitution .It defines and regulates the company’s status and power and it’s relationship with third parties.
It’s the dominant document to be considered in the registration of a company as it contain both the fundamental condition for the protection of the creditors,the outside public and also the shareholders of the company.
The memorandum is required to state the amount of the authorized share capital . The memorandum of association of the company cannot be amended retrospectively.
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The following are content of memorandum of association
i] Name of the company
ii] Registered office of the company and the fact that it shall be situate in operating country
iii] nature of the business or object of the company
iv] Restriction if any on the power of the company
v] Indication whether the company is private Ltd or public Plc
vi] Limitation of liability
vii] statement of share capital.
Company Article of association
The law require that company shall be registered in addition to a memorandum of association with article of association .The subscribers of the memorandum shall sign the article and it will prescribe the regulation for the governance of the company .
The Article contain the rules and regulation by which a company internal affairs are governed . The article of association deals with such matter as share ,share capital ,company meetings etc,. .it is important to note that most of the general provision usually contained in the article are now incorporated in the companies and allied matters act
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The article shall be
b] divided into paragraph numbered consecutively
c] signed by each subscriber of the memorandum in the presence of at least one witness who shall attest the signature.
The article shall bear the same stamp duty as if they were contained in the case of a company limited by guarantee ..The article of association shall state the number of members with which the company proposed to be registered .For the purpose of enabling the commission to determine the fees payable on registration.
Alteration can be done in the Articles by passing Special Resolution (SR) at Annual General Meeting (AGM) As a general rule, a power to alter the article must be exercise bona fide and for the benefit of the company as whole .it means the shareholders must proceed upon what in their honest opinion is for the benefit of the company.