It is a useful exercise understanding the documents involved in a company’s formation process.
A Memorandum of Association is an important document. It is part of a company’s formation and its purpose is to list the company’s rules and regulations to illustrate how it will be governed.
Within the Memorandum of Association will be the location of the registered office of the company (essential for government correspondence), the main purpose of the company, details of any share capital to be issued, a statement detailing shareholder liability and any limits and a clear, concise statement explaining if the company is a PLC.The Articles of Association is also a vital document and relates to the running of the company by the directors. This document sets out the rules to be followed, and companies may use standard articles of association which come under UK companies’ law, such as Table A.
Table A is a popular article for limited companies and lists internal activities such as conduct for general meetings, minutes, shares and power of directors. It also details how to pay dividends and how administrative tasks should be performed.
The articles may be altered to suit the needs of different companies, if desired, so that they relate closely to the procedures that will be specifically adopted. However, articles of association are generally left untouched because of their broad, generic provisions and guidelines which many companies find all encompassing and helpful.