A memorandum and articles of association is an older form of company constitution used in Australia before 1 July 1998. If your company was registered before that date, it was governed by two separate documents: a memorandum of association and articles of association. Companies registered after 1 July 1998 operate under either a company constitution, the replaceable rules under the Corporations Act 2001 (Cth), or a combination of both.
- The memorandum and articles of association only applied to companies registered before 1 July 1998. If your company was registered after that date, you’ve never had one and don’t need one.
- Old memorandum and articles don’t update themselves. Many pre-1998 companies still run off documents that require things the law no longer allows or mandate practices that are now illegal.
- The modern equivalent is a company constitution. A single document that covers what both the old memorandum and the articles used to cover, updated for current law.
- Without a constitution, the replaceable rules apply automatically. These are default rules in the Corporations Act. They work, but they won’t cover share transfers, buyouts, or what happens if a director dies.
- Updating from old memorandum and articles to a constitution requires a special resolution. You need at least 75% of shareholders to vote in favour. ASIC doesn’t need to be notified of the change itself, but the new constitution must be lodged within 14 days.
If you’ve just pulled up your company’s ASIC records and found references to a “memorandum and articles of association,” you’re not alone. Plenty of companies are still running off documents drafted decades ago. The question isn’t whether they’re technically valid. It’s whether they’re actually working for you in 2026.
What is a memorandum and articles of association?
Before the Corporations Act 2001 (Cth) came into force, Australian companies were governed by two separate documents. Together, they formed what was known as the memorandum and articles of association.
What is a memorandum of association?
The memorandum of association governed a company’s external affairs. It set out the company’s name, its legal form and structure, and its stated “objects” (the purposes the company was allowed to pursue). It also set out shareholder liability.
That objects clause was the most significant feature, and the most dangerous. Any action a company took outside its stated objects was considered ultra vires, meaning beyond its powers and legally void. A company that said it was formed “to sell fishing tackle” and then quietly started acting as a trustee was technically acting outside the law, even if no one noticed at the time.
Under section 125 of the current Corporations Act, a company can choose to include an objects clause in its constitution, but it’s no longer mandatory and rarely advisable. Modern constitutions typically give a company broad powers to do anything a legal person can do.
What are articles of association?
The articles of association governed a company’s internal affairs. Think of it as the rulebook for day-to-day operations. It set out:
- the rights and responsibilities of directors and shareholders
- contractual relationships between directors, shareholders, and members
- how shares could be transferred
- the rules for board meetings, AGMs, and special general meetings
- voting and appointment procedures
Having two documents for what is essentially one governance job meant ambiguities and contradictions were common. A clause in the articles might sit awkwardly with a statement in the memorandum, and sorting out which took precedence wasn’t always clear.
Does my company need a memorandum and articles of association?
It depends entirely on when your company was registered.
Companies registered before 1 July 1998 were required to have a memorandum and articles of association. If yours was registered before that date and you’ve never replaced those documents, they are still technically your governing documents today. The problem is that they were written for a legal environment that no longer exists.
Companies registered on or after 1 July 1998 have never used the memorandum and articles system. They operate under either a company constitution, the replaceable rules in the Corporations Act, or both.
What are the replaceable rules?
The replaceable rules are a set of default governance rules built into the Corporations Act. If your company doesn’t have a constitution, these rules govern how it operates. ASIC outlines all 39 replaceable rules on its website.
They’re called “replaceable” because a company can choose to replace any of them with its own rules in a constitution. You can adopt some and override others, or scrap all of them in favour of a bespoke document.
One important carve-out: the replaceable rules don’t apply to a proprietary company where the sole director is also the sole shareholder. In that situation, the director’s own conduct is the governance, and the rules aren’t needed.
Some rules only apply to proprietary companies. Others apply to public companies only. For instance, only a proprietary company can remove a director by simple resolution (s 203C), while rules on proxies (s 249X) are replaceable for proprietary companies but mandatory for public ones.
Replaceable rules vs company constitution: which is better?
Here’s the honest comparison:
| Replaceable rules only | Company constitution | |
|---|---|---|
| Cost to set up | Free (automatic) | Template from ~$0; lawyer-drafted from ~$1,500 |
| Share transfer rules | Basic defaults only | Fully customisable (pre-emption rights, drag-along, tag-along) |
| Director removal | Default process applies | Can be tailored to protect founders |
| Dividend policy | Not covered | Can specify how and when dividends are paid |
| Dispute resolution | Not covered | Can include deadlock and buyout clauses |
| Suitable for | Simple single-director companies | Any company with multiple shareholders or growth plans |
In practice, the replaceable rules work fine if you’re running a simple proprietary company on your own. The moment you have two or more shareholders, the gaps become real. There’s nothing in the replaceable rules about what happens if shareholders can’t agree, if someone wants to sell their shares, or if a director dies. A constitution covers all of that.
Why old memorandum and articles of association are a problem
This is where it gets practical. Pre-1998 documents aren’t just outdated. Some of them require things that are now illegal or that no longer make sense under current law. A few of the most common issues:
They often require AGMs that companies no longer need to hold
Most old memorandums and articles require an annual general meeting (AGM). The law changed. Proprietary companies are no longer required to hold AGMs. But if your old documents say you must hold one and you haven’t been, you’re technically non-compliant every year you skip it.
They typically require two directors when only one is now needed
Old documents were written when two directors were the norm. Under current law, a proprietary company only needs one. Having a two-director requirement baked into your old documents can complicate company decisions and create unnecessary governance obligations.
The objects clause can make your company act “ultra vires”
If your memorandum lists specific objects (say, retail trade), any business activity outside that list is technically beyond your company’s powers. If your company has since diversified, added a service arm, or changed direction entirely, you may have been acting outside your stated objects for years without knowing it.
This doesn’t usually cause problems until it does, which is typically when a company faces insolvency or a dispute and a liquidator or opposing lawyer starts examining the paperwork.
They may have share transfer rules that create problems for investors
Old articles often have rigid or out-of-date share transfer mechanisms. If you’re trying to bring in investors, issue new shares, or sell part of the company, a pre-1998 articles of association can make that harder than it should be. Investors and their lawyers will often flag this as a red mark in due diligence.
What Lawpath lawyers see when companies haven’t updated their documents
Across Lawpath consultations, a consistent pattern comes up when older companies finally get their governance reviewed. The issues are rarely catastrophic on their own, but they tend to cluster.
A common situation is a company that has been operating for 20 or 30 years under its original memorandum and articles, and nobody has looked at the documents in decades. When the business reaches a point where it needs to bring in a new shareholder, sell a stake, or restructure, the old governance documents suddenly become an obstacle. The company can’t proceed on the transaction until it has a constitution that everyone can actually work with.
Another pattern: companies where the memorandum’s objects clause no longer reflects what the business actually does. This is almost universal in pre-1998 documents. The original purpose of the company was written down in 1994, the business pivoted twice, and nobody updated the paperwork.
The third pattern involves companies that never had a shareholders agreement either. The old articles handle some of what a shareholders agreement would cover, but not all of it. A founder who brings in a business partner under old articles often doesn’t have protection around exit, buyout, or what happens if the relationship breaks down.
How to replace a memorandum and articles of association with a modern constitution
If your company was registered before 1 July 1998 and you’re still running on the old documents, here’s how to update them.
Step 1: Check your current documents
Pull your existing memorandum and articles from your company records or ASIC Connect. Read the objects clause and note what activities the company is described as doing. Check the director and AGM requirements. This gives you a baseline.
Step 2: Draft a new constitution
A new constitution replaces both the memorandum and the articles with a single document. You can use a Lawpath company constitution template as a starting point, or have a lawyer draft one from scratch if your situation is more complex (multiple share classes, institutional investors, specific industry requirements).
Make sure the new constitution includes clauses that fit how your business actually operates today, not how it operated when the original memorandum was written.
Step 3: Pass a special resolution
To adopt a new constitution (or replace an existing one), you need a special resolution passed by at least 75% of shareholders entitled to vote. The resolution must be passed at a general meeting or, for proprietary companies, can be passed as a written resolution signed by all shareholders.
Step 4: Lodge with ASIC within 14 days
Once the resolution is passed, you must lodge a copy of the new constitution with ASIC within 14 days using Form 206A. There’s no ASIC fee for this. From that point, the new constitution is your governing document.
Step 5: Keep the constitution current
Your new constitution shouldn’t sit in a drawer for another 25 years. Review it whenever the company’s ownership structure changes, when new legislation affects your industry, or when you’re planning a significant transaction. Amending a constitution requires another special resolution and another ASIC lodgement.
How does a company constitution relate to a shareholders agreement?
This is a common point of confusion. A company constitution and a shareholders agreement are both governance documents, but they serve different purposes and have different legal status.
The constitution is a public document, lodged with ASIC, that governs the company as a whole. It covers how the company is run: meetings, voting, share issuance, director powers.
A shareholders agreement is a private contract between shareholders. It covers what happens between them: dividend policy, what happens if a shareholder wants to exit, how disputes are resolved, drag-along and tag-along rights. It doesn’t need to be lodged with ASIC and won’t show up in a public search.
Most companies with more than one shareholder benefit from having both. The constitution provides the formal governance structure. The shareholders agreement fills in the gaps the constitution doesn’t cover and handles the relationship between the shareholders directly.
Frequently asked questions about memorandum and articles of association
What is the difference between a memorandum of association and articles of association?
The memorandum of association governed a company’s external affairs, including its name, structure, objects, and shareholder liability. The articles of association governed internal affairs, including director powers, share transfers, and meeting procedures. Together they formed the governance framework for companies registered in Australia before 1 July 1998.
Do Australian companies still need a memorandum and articles of association?
No, not for companies registered after 1 July 1998. Those companies operate under a company constitution, the replaceable rules in the Corporations Act 2001, or both. Companies registered before that date may still technically have a memorandum and articles as their governing documents, but updating to a modern constitution is strongly recommended.
Can a company still operate under its old memorandum and articles of association?
Yes, pre-1998 memorandum and articles remain valid as a company constitution under the Corporations Act. But many provisions in old documents are now outdated, inconsistent with current law, or create compliance obligations the company may not be meeting. Operating on old documents is a risk worth fixing.
How do I replace a memorandum and articles of association?
You pass a special resolution (75% shareholder vote), adopt a new company constitution, and lodge it with ASIC within 14 days using Form 206A. There is no ASIC fee for the lodgement. The new constitution replaces both the memorandum and the articles from the date it’s adopted.
What are replaceable rules and how do they relate to a constitution?
Replaceable rules are default governance rules in the Corporations Act 2001 that apply automatically if a company doesn’t have a constitution. A company can adopt a constitution that replaces some or all of these rules with its own provisions, or use the replaceable rules as-is without a constitution. There are 39 replaceable rules in total; ASIC publishes a summary on its website.
What happens if my company has no constitution and no memorandum and articles?
The replaceable rules in the Corporations Act apply by default. Your company can operate under them, but they don’t cover many situations that arise in practice, such as share transfer restrictions, dividend policy, or director appointment deadlock. For any company with more than one shareholder, having a proper constitution is worth the investment.
Does updating a company constitution need to be notified to ASIC?
Yes. A new or amended constitution must be lodged with ASIC within 14 days of the special resolution passing. The lodgement is made using Form 206A. There is no fee. ASIC doesn’t review or approve the contents, so there’s no waiting period after lodgement.
Get your company’s governance documents right
Old memorandum and articles aren’t urgent until they are. A transaction, a dispute, or an investor doing due diligence can expose years of outdated governance in a matter of days. Updating to a modern company constitution takes a resolution and a quick ASIC lodgement. It’s one of those things that’s genuinely quick to fix now and genuinely painful to fix in a crisis.
If you’re not sure whether your current documents are current or fit for purpose, it’s worth a conversation. Lawpath’s lawyers can review your constitution or help you update it to reflect how your company actually operates. You can get a fixed-fee quote from Lawpath’s lawyer marketplace and have it sorted without the open-ended billing.
