Relationship between the Memorandum and Articles

Relationship between the Memorandum and Articles

The following are some of the relation between Memorandum of Association and Articles of Association.

Relationship between Memorandum of Association and Articles of Association

Relationship between Memorandum of Association and Articles of Association

1. Both these documents are subordinate to the Companies Act.

2. Both these documents are public documents. Members of the company and outsiders can inspect them and can purchase a copy of them by paying the prescribed fee in the office of the Registrar.

3. The Articles cannot modify the terms of the Memorandum.

4. The Memorandum must always be read together with the Articles while clarifying certain things.

The following table gives the points of difference between the Memorandum and Articles.

Memorandum of Association Articles of Association
1. Charter of the company, and defines and also confines the fundamental conditions and objects for which company is granted incorporation. Bye law or internal regulation of the company.
2. Subordinate to the Companies Act. Subordinate to the Memorandum.
3. Principal document. Secondary Document.
4. Specifies the scope of authority and the objectives. Specifics the procedures to be followed to carry out the objectives stated in the Memorandum.
5. Defines the relationship between company and outsiders. Defines the relationship between the company and its members and between the members inter se.
6. Alteration is difficult. Alteration is comparatively easy.
7. Memorandum is compulsory for all companies. The company need not have its own Articles. Instead, it can adopt Table A as its Articles.
8. Acts to Memorandum cannot be ratified and outsiders have no remedy against the company. Acts ultra vires to Articles can be ratified by suitable legal formalities. Outsiders have a remedy even if the act is ultra vires the Articles.
9. It is not easy to alter the Memorandum. In some cases, the alteration requires a special resolution and confirmation by the National Company Law Tribunal. The Articles can be altered easily by a Special resolution provided the changes are lawful and within the limits of the company.

Distinction between the Memorandum and the Articles