What is a Memorandum of Association?
What is a memorandum of association? A practical guide to this formation document required when incorporating a UK company, including what it contains, how it has changed under the Companies Act 2006 and how it relates to the articles of association.
For an overview of different business types in the UK, see Business Structures .
The memorandum of association is a legal document that must be submitted when forming a new company in the UK. Under the Companies Act 2006, the memorandum serves a single, specific purpose: it provides evidence that the subscribers (the initial shareholders or guarantors) intend to form a company and agree to become its members.
The memorandum works alongside the articles of association to form the company’s constitution, but the two documents serve very different functions.
The Modern Memorandum (Post-2006)
Since the Companies Act 2006 came fully into force on 1 October 2009, the memorandum of association has been significantly simplified. The modern memorandum is a short, standardised document that states:
- The subscribers wish to form a company under the Companies Act 2006
- They agree to become members of the company
- In the case of a company with share capital, each subscriber agrees to take at least one share
That is all. The modern memorandum does not contain the company’s name, objects, share capital or any other provisions. These matters are now dealt with entirely in the articles of association and the application for registration.
Format
The memorandum must be in the prescribed form set out in the Companies (Registration) Regulations 2008:
- Form IN01 (for private companies limited by shares) includes a memorandum as part of the incorporation documents
- Each subscriber’s name and signature (or electronic authentication) must appear on the memorandum
- The memorandum cannot be amended after incorporation — it is a historical record of the company’s formation
The Old-Style Memorandum (Pre-2006)
Companies incorporated before 1 October 2009 under the Companies Act 1985 (or earlier legislation) had a much more detailed memorandum that typically included:
Objects Clause
The objects clause set out the purposes for which the company was formed. Any transaction outside these objects was ultra vires (beyond the company’s powers) and potentially void. Companies often adopted extremely broad objects clauses to avoid this problem.
Authorised Share Capital
The memorandum stated the company’s authorised share capital — the maximum number and value of shares the company could issue. The concept of authorised share capital was abolished by the Companies Act 2006.
Limited Liability Statement
A declaration that the liability of the members is limited by shares or by guarantee.
Company Name
The full name of the company, including “Limited” or “Ltd”.
Registered Office Location
Whether the registered office was situated in England and Wales, Scotland or Northern Ireland.
What Happened to Old-Style Memorandum Provisions?
When the Companies Act 2006 came into force, old-style memorandum provisions were treated as follows:
| Old provision | Treatment under Companies Act 2006 |
|---|---|
| Objects clause | Deemed to be part of the company’s articles (s.28) |
| Authorised share capital | Deemed to be part of the articles (s.28) |
| Liability statement | No longer in the memorandum |
| Company name | Recorded on the certificate of incorporation |
| Registered office location | Recorded at Companies House |
Provisions deemed to be part of the articles can be amended or removed by special resolution (75% majority), unless they are subject to entrenchment or variation of class rights procedures. Many older companies have passed special resolutions to remove outdated objects clauses and references to authorised share capital from their constitutional documents.
Unrestricted Objects
Under the Companies Act 2006, a company’s objects are unrestricted unless the articles specifically restrict them (s.31). This means that modern companies can carry on any lawful activity without needing an objects clause. The doctrine of ultra vires has been effectively abolished for third parties dealing with the company in good faith (s.40).
Memorandum vs. Articles of Association
| Feature | Memorandum of association | Articles of association |
|---|---|---|
| Purpose | Evidence of intention to form the company | Rules for governing the company |
| Content (post-2006) | Subscribers’ names and agreement to form the company | Directors’ powers, shareholders’ rights, governance procedures |
| Amendment | Cannot be amended after incorporation | Can be amended by special resolution |
| Length | One page | Typically 20-50 pages |
| Filing | Filed once on incorporation | Filed on incorporation and whenever amended |
| Public availability | Available at Companies House | Available at Companies House |
The Subscribers
The people or entities who sign the memorandum are called subscribers. They are the company’s founding members:
- A private limited company can have as few as one subscriber
- A public limited company must have at least one subscriber
- Each subscriber must take at least one share (for companies limited by shares)
- For companies limited by guarantee, each subscriber agrees to contribute a specified amount if the company is wound up (typically £1)
The subscribers’ details are recorded at Companies House and form part of the company’s permanent public record. The subscriber shares are the initial shares of the company, and the subscribers are entered as the first members in the company’s register of members.
How the Memorandum Fits into the Incorporation Process
The memorandum is one of several documents required to register a company with Companies House :
- Memorandum of association — signed by the subscribers
- Application for registration (form IN01) — containing the company name, registered office address, details of directors and the statement of capital
- Articles of association — the governance rules (or an election to use the model articles)
- Statement of compliance — confirming all legal requirements have been met
- Filing fee — £12 for online registration, £40 for paper, or £30 for same-day service
Once Companies House processes the application and is satisfied that all requirements are met, it issues a certificate of incorporation confirming the company’s formation, registered number and date of incorporation.
Practical Considerations
Do I Need to Draft a Memorandum?
For companies formed after 1 October 2009, the memorandum is a standard prescribed form and does not require drafting. It is automatically generated as part of the online incorporation process through Companies House WebFiling or third-party formation agents.
Can the Memorandum Be Changed?
No. The memorandum is a fixed historical document that records the formation of the company. It cannot be amended after incorporation. If the company’s governance arrangements need to change, the changes are made to the articles of association .
What About Old-Style Provisions?
If your company was incorporated before October 2009 and still has old-style memorandum provisions (objects clause, authorised share capital), these are now treated as part of your articles. You can remove them by passing a special resolution and filing the updated articles with Companies House. This is good practice to simplify the company’s constitutional documents.
Memorandum for an LLP
A limited liability partnership does not have a memorandum of association. Instead, an LLP is formed by filing an incorporation document (form LL IN01) with Companies House, signed by the subscribers.
Memorandum for Companies Limited by Guarantee
For companies limited by guarantee (rather than by shares), the memorandum works slightly differently. Instead of each subscriber agreeing to take shares, each subscriber agrees to contribute a specified amount to the company’s assets if the company is wound up.
The guarantee amount is typically £1 per member. This structure is commonly used for:
- Charities and not-for-profit organisations
- Community interest companies limited by guarantee — see What is a CIC?
- Management companies for residential property
- Membership organisations, trade associations and clubs
The memorandum for a guarantee company is in a different prescribed form (form IN01 for guarantee companies) but serves the same fundamental purpose: recording the subscribers’ intention to form the company.
Common Misconceptions
The Memorandum is Not the Same as the Articles
The memorandum and the articles of association are separate documents with different purposes. The memorandum records the act of formation. The articles set out the rules for running the company. After incorporation, the articles are the living governance document, while the memorandum is a historical record.
The Memorandum Cannot Be Used to Restrict the Company
Under the Companies Act 2006, the memorandum itself imposes no ongoing restrictions on the company. Any provisions from old-style memoranda that might restrict the company (such as objects clauses) are now treated as part of the articles and can be removed by special resolution.
Subscribers Are Not Necessarily the Long-Term Owners
The subscribers who sign the memorandum are the company’s first members, but they can transfer or sell their shares immediately after incorporation. The memorandum records who formed the company, not who owns it over time.
Role of Directors
While the memorandum is signed by the subscribers (not the directors), the company’s directors are responsible for ensuring the company operates within its constitution. This means directors should be familiar with both the memorandum and the articles, particularly if the company has old-style provisions that may restrict its activities.
Directors must also ensure that changes to the company’s constitution are properly authorised and filed. The confirmation statement provides an annual opportunity to verify that all constitutional documents on file at Companies House are up to date.
Interaction with Shareholders’ Agreements
The memorandum and articles of association form the company’s public constitution. In addition, shareholders often enter into a shareholders’ agreement , which is a private contract regulating their relationship and the governance of the company.
The memorandum has no direct interaction with a shareholders’ agreement, but the agreement often refers to the company’s constitutional documents and may require that the articles are not amended without the consent of all parties. When reviewing the company’s governance framework, it is important to consider all three documents together.
Related Concepts
- Articles of association — the governance rules that complement the memorandum
- Companies House — where the memorandum is filed on incorporation
- Director duties — obligations to act within the company’s constitution
- Shareholders’ agreement — a private contract supplementing the constitution
- Confirmation statement — annual filing confirming company details