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.