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    Question

    Under the Companies Act, 1956, what is the relationship

    between the Memorandum of Association and the Articles of Association?
    A The Memorandum and Articles are identical legal documents Correct Answer Incorrect Answer
    B The Memorandum is the company's charter defining external powers, while Articles regulate internal management Correct Answer Incorrect Answer
    C Articles are subordinate to the Memorandum and cannot override its provisions Correct Answer Incorrect Answer
    D Both regulate only internal affairs and cannot bind third parties Correct Answer Incorrect Answer
    E The Memorandum can be amended more easily than Articles Correct Answer Incorrect Answer

    Solution

    The Memorandum of Association defines the company's external powers, scope, and constitutional limitations its charter defining what the company can do. It contains objects clauses, share capital, liability, and names of subscribers. The Articles of Association regulate internal management and conduct of the company how directors manage, shareholding transfer, meetings, and decision-making procedures. While the Memorandum is fundamental and binding on the company and third parties (doctrine of constructive notice), Articles bind only members inter se. Articles cannot override or contradict the Memorandum; they are subordinate constitutional documents operating within the boundaries set by the Memorandum.

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