Memorandum of Association - Company Limited by Guarantee

The Memorandum of Association is a legal document that establishes the existence of a company limited by guarantee and not having a share capital. It is an important document as it sets out the fundamental details and objectives of the association.

 

The entire document consists of several sections that provide detailed information about the association. The first section states the name of the charity and its registered office, which is the jurisdiction state. The second section outlines the objects for which the association is established. It specifies that the association will only deal with or invest any property subject to trusts in a manner allowed by law. It also clarifies that the association's objects do not extend to the regulation of relations between workers and employers or organizations of workers and organizations of employers.

 

The third section of the document focuses on the income and property of the association. It states that the income and property, regardless of their source, will be applied solely towards the promotion of the association's objects as set out in the Memorandum of Association. It further specifies that no portion of the income and property shall be paid or transferred directly or indirectly to the members of the association, except for certain circumstances outlined in sub-clauses (4) and (5). These circumstances include the payment of reasonable and proper remuneration to officers or servants of the association, payment of out-of-pocket expenses to board members, payment of interest on money lent by board members, and payment of rent for premises demised or let by association members.

 

The fourth section of the document highlights the limited liability of the members of the association. It states that the liability of the members is limited, meaning that their personal assets are protected in the event of the association being wound up. The fifth section outlines the obligation of every member to contribute to the assets of the association in the event of its winding up, for the payment of debts and liabilities and the costs of winding up.

 

The final section of the document addresses the distribution of property upon the winding up or dissolution of the association. It states that any remaining property shall not be distributed among the members of the association but shall be given or transferred to another institution or institutions with similar objects, which prohibit the distribution of income and property among their members to the same extent as imposed on the association. The determination of such institution(s) is to be made by the members of the association or, in default, by a judge of the jurisdiction state with jurisdiction in regard to charitable funds.

 

In summary, the Memorandum of Association is a crucial document that establishes the existence of a company limited by guarantee and not having a share capital. It outlines the name and registered office of the association, its objects, the application of income and property, the limited liability of members, and the distribution of property upon winding up or dissolution.

How to use this document?

1. Identify the name of the charity and its registered office, which should be situated in the jurisdiction state.

2. Understand the objects for which the association is established, ensuring that they do not extend to the regulation of relations between workers and employers or organizations of workers and organizations of employers.

3. Recognize that the income and property of the association should be applied solely towards the promotion of its objects as set out in the Memorandum of Association.

4. Note that no portion of the income and property should be paid or transferred directly or indirectly to the members of the association, except for specific circumstances outlined in sub-clauses (4) and (5).

5. Be aware of the limited liability of the members, which protects their personal assets in the event of the association being wound up.

6. Understand that every member has an obligation to contribute to the assets of the association in the event of its winding up, for the payment of debts, liabilities, and winding-up costs.

7. Recognize that any remaining property upon the winding up or dissolution of the association should not be distributed among the members, but should be given or transferred to another institution or institutions with similar objects.

8. Determine the institution(s) to which the remaining property should be given or transferred, either by the members of the association or, in default, by a judge of the jurisdiction state with jurisdiction in regard to charitable funds.