The Pillars of Company Formation: Articles and Memorandum of Association

Many registration companies in the UK have expertise in a broad array of formation needs such as public limited companies or community interest companies. The crucial component for the consumer to determine is whether the business incorporation agents have the industry knowledge to make the company formation process fast and effective.

Otherwise, it may not be worth the investment of time and resources. To that end, two separate documents of association are required to form your business: memorandum and articles of association both detail the operations of the business while serving different purposes. Memorandum of association is another requirement of company formation for UK businesses. This is issued during the registration process and serves the function of enumerating the company’s index of bylaws and regulations that will oversee its operation. Inside, the information will cover many elements. For example, the purpose of the company will be explored in detail in order to lay out information resembling a mission statement that will govern the business. Secondly, the location of the company’s registered office will be included in the memorandum of association. A statement detailing shareholder and member liability is also a vital part of the overall document. Lastly, information on the available share capital that can be issued by the company must be made available in the memorandum of association. In addition, if the company is a PLC, then that fact must be clearly set forth. A PLC, or public limited company, is a business corporation that is allowed to offer its shares to the public for trading. The Registrar of Companies must receive both the memorandum and articles of association. The latter of these documents is an in depth review of the business’s internal operations and company affairs. The relationships between management, employees and members are all explored and stipulated in the articles of association. The purpose of this step in the process is to provide a uniform and standardized method of establishing the integrity of emerging companies. Essentially, these are the rules which company directors are expected to follow in the normal course of business. Some information set forth may include meeting minutes, dividend payment protocol, general meeting conduct, powers of directors and the overall bylaws for administrative operations. This is not an exhaustive list and specific guidelines should be consulted. It is not hard to imagine the degree to which both the articles and memorandum of association can become mired in detail. Coupled with the pressure to ensure their proper completion and submission, there is a powerful incentive to partner with a company formation agency to guarantee success. Many business owners find it nearly impossible to keep all the details straight when it comes to the sea of regulations that accompany forming a company in the UK. As your desire to register a business grows, it is advisable to search for a company formation agent that can fulfill your incorporation needs.