The memorandum of association establishes a company’s constitutional parameters in the form of a public document outlining its scope, share structure and membership terms.
Key Features:
- Specifies the company’s name, objectives, and authorized share capital.
- Defines classes of shares and associated rights and restrictions.
- Establishes broad operational powers for flexible activities.
- Can be periodically amended through members’ resolutions.
Example:
A software startup’s memorandum identified it as a private company limited by shares with objectives covering software development and licensing.
Key Takeaways:
The memorandum of association forms the legal basis of a company as the contract governing relations between the entity and members. It provides the foundational structure for a company’s governance and acts as its core constitutional document.