Company Law Essay Help : Memorandum of Association
Law Cases referred to in this section:
Ashbury Railway Carriage and Iron Co Ltd v Riche (1875) LR 7 HL 653
Welton v Saffery (1897) AC 299
Re Duncan Gilmour & Co (1952) 2 All ER 871
All references to statute on this page are to the Companies Act 1985 unless otherwise stated.
The memorandum of association defines the distinctive nature of the company it represents. Where there is a conflict between the memorandum of association and the articles of association, the memorandum will prevail (Welton v Saffery (1897) AC 299), although ambiguities in the memorandum may be reserved by reference to the articles (Re Duncan Gilmour & Co (1952) 2 All ER 871).
The memorandum of association for every company will state:
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the company name (Section 2(1)(a));
- whether the registered office of the company is to be situated in England and Wales (Section 2(1)(b)), or in Wales (Section s 2(2)), or in Scotland (Section s 2(1)(b)); and
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the object(s) of the company (Section s 2(1)(c)) - as the company, whether limited or unlimited, is only permitted to do what is within or is incidental to the objects stated in its memorandum (Ashbury Railway Carriage and Iron Co Ltd v Riche (1875) LR 7 HL 653).
The object is often stated in a very general nature, i.e.:
"the object of the company is to carry on any trade or business whatsoever (Section 3A(a)); and the company has power to do all such things as are incidental or conducive to the carrying on of any trade or business by it (Section 3A(b))".
The memorandum of companies that are limited by shares or guarantee will also state that the liability of its members is limited. The memorandum of a company limited by guarantee also will state that each member undertakes to contribute to the assets of the company if it should be wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.
Where a company has share capital, unless the Company is limited the memorandum also states the amount of the share capital with which the company proposes to be registered and the division of the share capital into shares of a fixed amount. Each subscriber to share capital must take at least one whole share and the memorandum will show the number of shares taken by each subscriber against his name.
The contents of the memorandum of association may not be altered, other than as allowed by the Companies Act 1985.
The memorandum will be signed by each subscriber in the presence of at least one witness, who will attest the signature - note that this is subject to the provisions concerning electronic communications.
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