6 Major Differences between Memorandum of Association and Articles of Association

6 Major Differences between Memorandum of Association and Articles of Association are listed below:

Memorandum of Association:

1. It is the fundamental document

2. It is the Charter of the company.

3. It dictates external and internal affairs of the company.

4. It has effects on the members as well as the outsiders.

5. Ratification: No act can be ratified which is done beyond the memorandum: This is called as “Doctrine of Ultra Vires”. 100% members of the company also cannot ratify such ultra virus acts.

6. The memorandum of association is bound to observe.

(a) The provisions of the Companies Act,

1956;

(b) Any other law in force.

Articles of Association:

1. It is the subsidiary document.

2. These are me regulations of the company.

3. It dictates only internal affairs and management of the company.

4. It has effects on the members and employees of company.

5. Ratification: An act covered by articles of association can be ratified by majority principle. It is called ‘Indoor Management’.

6. The Articles of Association are bound to observe,—

(a) The provisions of the Companies Act, 1956 and Rules;

(b) Any other law in force; and

(c) The memorandum of association of the company.