Business Start Up Help: The Memorandum of Association

Your memorandum of association is a document that can help your start up business gain quicker access to official incorporation status. This document provides basic information on how the company was formed, who helped to form it, and how the business interacts with the marketplace.

Legal Status of the Memorandum

In most states the Memorandum of Association will not be a legally enforceable contract. For example, the memorandum may list each shareholder's ownership in a company but still be challenged in court in the case of a shareholder dispute. Key exceptions are commonwealth states; here, there may be different rules regarding the formation of a company through a memorandum.

Purpose of the Memorandum

Though it is not actually a legal document, the memorandum does serve a specific purpose. It is turned in with a business application when you are seeking legal incorporation of your entity. The County Registrar will consider the articles when issuing your corporation status. The articles will remain on file with the business application as long as the business is in operation. Changes to the memorandum can be officially entered through an addendum signed by a notary. The ongoing purpose is to inform the registrar of the ownership and function of a given business.