Yeah, you read the title right. You can only imagine the disappointment when I realised MEMART wasn’t my awesome superhero with lightning speed and consistent awesomeness …………… Well let’s get down to the nitty gritty of the whole post, MEMART means Memorandum and Articles of Association, and serves as the constitution of the company, mostly in all affairs relating regulating a company’s internal and external activities.
Let’s examine the MEMART document, we’ll begin with the Memorandum of Association, it contains the objects, powers and scope of the company, beyond which a company is not allowed to work, i.e. it limits the range of activities of the company.
It basically handles the external relations of the company, whereas the Articles of Association, defines the rules and regulations made by the company for its administration and day to day management. In addition to this the articles contain the rights, responsibilities, powers and duties of members and directors of the company. It also includes the information about the accounts and audit of the company. So the Articles of Association take care of the internal running of the company.
All the company’s shareholders, creditors, investors, etc. is presumed to have read the company’s MEMART, i.e. they must know the company’s objects and its area of operations. There are six criteria every company personnel should be conversant with when reading the Memorandum of Association.
1. Name Clause – Any company cannot register with a name which CAC may think unfit and also with a name that too nearly resembles with the name of any other company.
2. Situation Clause – Every company must specify the name of the state in which the registered office of the company is located.
3. Object Clause – Main objects and auxiliary objects of the company.
4. Liability Clause – Details regarding the liabilities of the members of the company.
5. Capital Clause – Total capital of the company.
6. Subscription Clause – Details of subscribers, shares taken by them, witness etc.
Typically, the Articles of Association should primarily contain provisions relating to
1. Share capital,
2. Classes of shares,
3. Rights and restriction to each class of shares,
5. Transfer and transmission of shares,
10. Company secretary,
11. Company seal,
12. Winding up etc.
The MEMART also helps in the proper management and functioning of the company throughout its life. That is why every company is required to have its own memorandum and articles. With all the expectation of MEMART being a cartoon character dashed, We do hope you’ve familiarised with the MEMART document.