Memorandum of association

The memorandum of association of a company, often simply called the

memorandum (and then often capitalised as an abbreviation for the official name,
which is a proper noun and usually includes other words), is the document that
governs the relationship between the company and the outside. It is one of the
documents required to incorporate a company in the United Kingdom, Ireland,
Pakistan and India, and is also used in many of the common law jurisdictions of the
Commonwealth.

Requirements
While it is still necessary to file a memorandum of association to incorporate a new company, it
no longer forms part of the company’s constitution and it contains limited information compared
to the memorandum that was required prior to 1 October 2009.

It is basically a statement that the subscribers wish to form a company under the 2006 Act, have
agreed to become members and, in the case of a company that is to have a share capital, to take
at least one share each. It is no longer required to state the name of the company, the type of
company (such as public limited company or private company limited by shares), the location of
its registered office, the objects of the company, and its authorised share capital.[1]

Companies incorporated prior to 1 October 2009 are not required to amend their memorandum.
Those details which are now required to appear in the Articles, such as the objects clause and
details of the share capital, are deemed to form part of the Articles.

Capacities
The memorandum no longer restricts what a company is permitted to do. Since 1 October 2009,
if a company's constitution contains any restrictions on the objects at all, those restrictions will
form part of the articles of association.

Historically, a company's memorandum of association contained an objects clause, which limited

its capacity to act. When the first limited companies were incorporated, the objects clause had to
be widely drafted so as not to restrict the board of directors in their day to day trading. In the
Companies Act 1989 the term "General Commercial Company" was introduced which meant
that companies could undertake "any lawful or legal trade or business."

The Companies Act 2006 relaxed the rules even further, removing the need for an objects clause
at all. Companies incorporated on and after 1 October 2009 without an objects clause are deemed
to have unrestricted objects. Existing companies may take advantage of this change by passing a
special resolution to remove their objects clause.
If the company is to be a non-profit making company, the articles will contain a statement saying
that the profits shall not be distributed to the members.

Purpose
The memorandum of association records the agreement of the first subscribers to form a
company under the 2006 Act, to become members and, in the case of a company that is to have a
share capital, to take at least one share each.