what should go in a Memorandum of Association?
I'm planning on setting up a new business in the UK and gather I need a "Memorandum of Association". How important is this for a one-man company? Unbelievably, googling it does not yield any example documents.
2 Answers
As a principle, I would recommend using an agent - they supply all this kind of thing and it costs about GBP 50 to get the company registered including a standard set of paperwork - see this question for some suggestions. My view is that unless this is your core competency, your time and effort could be better spent that on the fine details of company formation.
Having said that, from 1 October 2009, there was a change in UK company law which meant that a separate Memorandum of Association was no longer required - the official registration form you submit to create the company is effectively the memorandum of association - it states who the intended shareholders are, that they wish to form a company and that they agree to be shareholders of it.
Separately, you will need a set of 'Articles of Association' or 'Articles' for short - this is the document that states what activities your business is permitted to conduct (i.e. it's own house rules, if you like). A standard set of articles usually let's you do anything that's legal; however, it is unlikely to matter much until you come to sell your company (for many millions :-) of course).
A good book to understand what's involved in starting and running a UK limited company is "Running a Limited Company" by David Impey & Nick Montague (although make sure to get the latest edition).
-
Hi Steve - I'm pretty sure the Memorandum of Association and Articles of Association are 2 separate documents? http://en.wikipedia.org/wiki/Articles_of_association_(law) http://en.wikipedia.org/wiki/Memorandum_of_association – Thom Carver 12 years ago
-
I hear where you're coming from, but I kind of object to the idea that I have to pay £50 because of an unclear process. It seems like one of the problems stackexchange tries to solve - and I think this is the last hurdle to doing it all myself – Thom Carver 12 years ago
-
Thom - I double-checked and you were right, so I've edited my answer to correct the misinformation. In short, you don't need a separate memorandum of association any more to form a UK company. – Steve Wilkinson 12 years ago
-
I'm afraid I still think its the other way around (based on the form I downloaded from companies house - it's the *articles* that are now included in the form, the *memo* still has to be provided separately. See the registration form: http://www.companieshouse.gov.uk/forms/generalForms/IN01_application_to_register_a_company.pdf – Thom Carver 12 years ago
-
Thom - I see what you mean - the form is confusing. The information I included above is from the book which seems to be pretty comprehensive - if you want to handle this all yourself I would recommend getting a copy. Sorry not to be able to offer more definitive info. – Steve Wilkinson 12 years ago
http://www.legislation.gov.uk/uksi/2008/3014/pdfs/uksi_20083014_en.pdf Explanatory Note (p6) (note the "Schedules" are included in the pdf):
The Companies Act 2006 (c.46) makes changes to the form of a company’s constitutional
documents. The Companies Act 1985 (c.6) and the Companies (Northern Ireland) Order 1986 (S.I.
1986/1032 (N.I. 6)) both require a company to include a substantial amount of information in its
memorandum of association and allow a company’s constitutional rules to be divided between its
memorandum and articles of association. Under the Companies Act 2006 all the constitutional
rules will be contained in the articles of association; the memorandum of association will be a
much shorter document.
Regulation 2 prescribes the form of the memorandum of association required under the Companies
Act 2006. The forms in Schedules 1 and 2 serve the limited purpose of providing evidence of the
intention of each subscriber to form a company and become a member of that company and, in the
case of a company that is to have a share capital on formation, to take at least one share.
