The Memorandum of Association is considered as the constitution of a company. It provides the foundation to the structure or the building of the company. The memorandum of association is defined as a company’s charter. It defines the limitations of a company’s powers.
● Particular parts of the memorandum can be altered by the company whenever and however required.
● The memorandum of association enables shareholders, creditors and investors to know the permitting range of the company.
● It regulates the company’s external affairs.
Importance of Memorandum
The memorandum of association comes with its own importance −
● It defines the limitations of the company.
● The whole structure of the company is built on the basis of the memorandum.
● It defines the scope of activities of the company.
● It sets out a company’s written goals.