THE MEMORANDUM OF ASSOCIATION II
share capital, the articles must state the amount thereof
's. 7 (1)], if it has no share capital, the articles must state the
number of members with which it proposes to be registered
s. 2})].

oe memorandum of association is the charter of the Nature of
company and defines its powers, whilst the articles of asso- Memo-
ciation form a code of regulations for the internal manage- fandum.
ment of the company. The following extracts from the
judgments of the House of Lords in Ashbury Railway
Carriage Company v. Riche (1875, L.R., 7 H.L. 653), show
clearly the functions of the memorandum.

Lord Cairns, L.C., says: ‘I will ask your Lordships to
observe . . . the marked and entire difference there is between
the two documents which form the title-deeds of companies
of this description—I mean the memorandum of association
on the one hand and the articles of association on the other
hand. With regard to the memorandum of association,
your Lordships will find, as has often already been pointed
out, . . . that that is, as it were, the charter, and defines
the limitation of the powers of a company to be established
under the Act. With regard to the articles of association,
those articles play a part subsidiary to the memorandum
of association. They accept the memorandum of Associa-
tion as the charter of incorporation of the company, and so
accepting it the articles proceed to define the duties, the
rights and the powers of the governing body as between
themselves and the company at large, and the mode and form
in which the business of the company is to be carried on, and
the mode and form in which changes in the internal regula-
tions of the company may from time to time be made. With
regard, therefore, to the memorandum of association, if
you find anything which goes beyond that memorandum
or is not warranted by it, the question will arise whether
that which is so done is ultra vires, not only of the directors
of the company, but of the company itself. With regard
to the articles of association, if you find anything which,
still keeping within the memorandum of association, is a
violation of the articles of association, or in excess of them,
the question will arise whether that is anything more than
an act extra vires the directors but intra vires the company.’

Lord Selborne, in the same case, says: ‘I only repeat what
Lord Cranworth’ [in Hawkes v. Eastern Counties Railway
1855), 5 H.L.C. 331], ‘stated to be settled law, when I say
that a statutory corporation, created by Act of Parliament
for a particular purpose, is limited, as to all its powers, by
the purposes of its incorporation as defined in that Act.