The memorandum of association is one of the most important documents of a company as it outlines the company’s external activities. It is imperative to create and file this document with the correct regulatory authority in order to legally incorporate and register a business entity.
The Importance of the Memorandum of Association
A company’s memorandum of association, often referred to as the memorandum, is the primary document that outlines the business entity’s constitution. When establishing a company, it is imperative to obtain the relevant legal documents and file them with the regulatory body to ensure that the registration procedure is completed successfully.
The primary purpose of the memorandum of association is to administer the external operations of a business entity – that is, the relationship between the company and the external world. The following is a brief outline of the information included within the memorandum of association:
- Company name
- Shareholder details
- Number of shares held by each shareholder
- Registered address of the company
- Company objective
- Amount of authorized share capital
- Liability of each shareholder – whether by shares or by guarantee
- Type of contracts the company may enter
In the event that there are any alterations or moderations in any of the above mentioned elements, it is important to amend the memorandum of association accordingly. It is the document that should be kept up to date to directly reflect and correlate with the services and operations of the company.