Company Law

THE CATHOLIC UNIVERSITY OF EASTERN AFRICA

UNIT CODE: CMM 411

UNIT NAME: COMPANY LAW

DATE DUE: 16- 3- 12

NAME: STEVE MONG’ARE OMBUI

LECTURER: RONALD OJUKU MOMANYI

ASSIGNMENT

The memorandum of Association of a company is a document that governs the relationship between the company and the outside. It is the constitution that provides the foundation on which its structure is built. It is a key document that is required for incorporation of a company and it also defines the scope of a company’s activities both internally and externally.

According to Lord Cairns, “The memorandum of association of a company is its charter and defines the limitation of powers of a company. The memorandum contains the fundamental conditions upon which alone the company is allowed to be incorporated”.

According to Lord Macmillan, “The purpose of the memorandum is to enable the shareholder, creditors and those who deal with the company to know what is permitted range of enterprise.”

In the words of Charles Worth, “the memorandum of association is the company’s charter and defines the limitations of its powers. Its purpose is to enable shareholders; creditors and those who deal with the company, to know what its permitted range of enterprise is. It is the document which informs all persons dealing with the company, what the company is formed to do. How capital will it raise it’s its nationality is? It regulates the company’s external affairs, while the articles of association regulate its internal affairs.” This is an exhaustive definition which explains the nature and scope of memorandum.

Section 2 (28) of the Companies Act defines a memorandum as “the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous Company Law or of this Act.” The contents of the memorandum are explained in Section B of the Act.

IMPORTANCE OF MEMORANDUM

* Charter. Memorandum of Association of a company is its charter...