A memorandum of association is a document that is concluded when an organization is created by its founders. In this agreement, participants determine the conditions for joint activities, the procedure for the transfer of their property and participation in the work of the enterprise. Such a document should also contain clauses on the distribution of profits and losses between the founders, management of the company, as well as the procedure and conditions for the withdrawal of participants from its composition.
Document requirement
According to the Civil Code, a memorandum of association by its status can be attributed to constituent documents. However, the agreement on the establishment of a limited liability company is not considered constituent documents of such a legal entity.
The constituent agreement must necessarily meet the requirements of the law. The documents must specify the name of the company, its location, the procedure for managing the activities of the organization and other data that are prescribed by law. The documentation of non-profit structures should also indicate the subject and purpose of their activities. Parties to the agreement may be at least two parties, which may be citizens, legal entities, or even public law entities. For example, the memorandum of association of a company is entitled to conclude both individuals and legal entities. True, for certain types of enterprises certain restrictions are established on the composition of the founders. Any participant in the contract may withdraw from the founders without the consent of other members.
Features for various types of legal entities
For a full partnership, the contract is the only constituent document. At the same time, for associations, different types of societies, along with the constituent agreement, the charter is an important document. In addition, if a memorandum of association of a closed company contradicts its charter, then the provisions of the latter will play a decisive role. In addition, the law allows closed joint-stock companies to transform into a cooperative or limited liability company. By decision of the shareholders, it can be reissued to a non-profit organization.
State registration
Until the company has passed state registration, the memorandum of association may be terminated or amended, and all the resulting obligations of the parties are allowed to terminate. For example, such an agreement may terminate if members of the company do not have the opportunity to create a legal entity.
After conducting state registration, all parties to the memorandum of association are required to begin its execution. Now you can change or terminate such an agreement only with the subsequent registration of changes in the tax office. The memorandum of association is valid throughout the entire existence of the enterprise, regardless of legal form. In some cases, if provided for by the contract, it will be valid after the liquidation of the company until the founders pay the creditors and divide the remaining property.