Legal effect of memorandum and articles

LEGAL EFFECT OF MEMORANDUM AND ARTICLES

The memorandum and articles, when registered, bind a company and the members there of to the same extent as if they had been sighned by the company and each member.

1.members to the company:

The memorandum and the articles consistute a binding contract between the members and the company the effect of this is that each member is bound to the company as if each member has actually sighned the memorandum and the articles.

2.company to the members:

A company is bound to the individual members in terms of their ordinary rights as members,only accordance with the provisions in the memorandum and the articles. A member cn obtain an injuction restraining the company from doing an altra virus act.

3.members inter se:

As between the members inter se the memorandum and the articles constitue a contract between them and are also binding on each member as against the other or others. Such a contact can, however, be enforced through the medium of the company.

4.company to the outsiders:

The articles do not constitue any binding contract as between a company and an outsiders cannot take advantage of the articles to found a claim against the company.


COMPANIES WHICH MUST HAVE THEIR OWN ARTICLES

The following companies shall have their own articles,namely,

a)unlimited companies,

b)companies limited by gurantee.

c)private companies limited by shares.

The articles shall be signed by the subscribers of the memorandum and registered along with the memorandum