memorandum of association

Definition

Document that regulates a firm's external activities and must be drawn up on the formation of a registered or incorporated firm. As the firm's charter it (together with the firm's articles of association) forms the firm's constitution. Also called 'memorandum,' it gives the firm's name, names of its members (shareholders) and number of shares held by them, and location of its registered office. It also states the firm's (1) objectives, (2) amount of authorized share capital, (3) whether liability of its members is limited by shares or by guaranty, and (4) what type of contracts the firm is allowed to enter into. Almost all of its provisions (except those mandated by corporate legislation) can be altered by the firm's members by following the prescribed procedures. The memorandum is a public document and may be inspected (normally on payment of a fee) by anyone, usually at the public office where it is lodged (such as the registrar of companies office). Called articles of incorporation in the US.