New Company Set Up – Importance of Memorandum of Association

According to the firms House statistics published in, May 2010 saw 28,900 companies being established in England, Wales and Scotland. The United Kingdom witnesses approximately 300,000 business company formations every year. For a new company setup, the entrepreneur has to complete several formalities, including submission of documents (the Memorandum and Articles of Association and form IN01) and paying the registration fees of (GBP)15 or (GBP)20 (in line with the procedure for registration opted). The Memorandum of Association is of primary importance and needs to be filled carefully.

New Company CREATE: Memorandum of Association

Failure to submit the Memorandum of Association in the correct format can result in rejection of the registration form. Therefore, a new company, along the way of being setup, has to be very careful about following correct processes. Some of the information that should be included in the form are:

Registered address: The company location must be mentioned clearly in the Memorandum because any communication from Companies House will arrive at the mentioned address. Notices, summons, writs are dispatched to the official address registered at the firms House.

Business objectives: Company objectives refer to:

* The primary object clauses

* Clauses governing the standard functioning of the business

The objects clause must comprise all possible actions that the company plans to undertake in order to achieve the objectives.

Initial member subscription: The Memorandum must include a clause relating to the initial company members. This clause is meant to convey the names of each member, their mailing addresses and a brief description of who they are and what they mean for the company.

Additionally, in case of a limited company formation, the company needs to mention ‘limited’ or ‘ltd’ as part of the name of the proposed organization. One cannot dispense with this particular last word unless special permission has been obtained on grounds of unlimited liability of the managerial committee members or shareholders.

Prior to registering an organization, entrepreneurs must perform a name check in the firms House name index to ensure that the proposed name does not match any on the list. This too, will result in the registration being declined.

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