What Are Memorandum And Articles Of Association In Australia?

If you’ve been researching how companies are set up, you’ve probably come across “memorandum and articles of association.” They’re still used in the UK and some other jurisdictions, and you’ll sometimes see those terms in older Australian records.

In Australia today, companies don’t use a separate memorandum and articles. Under the Corporations Act 2001 (Cth), your company operates under either a single Company Constitution, the Act’s “replaceable rules,” or a mix of both.

In this guide, we’ll explain what “memorandum and articles of association” mean in the Australian context, how they relate to a modern Company Constitution, and the practical steps to adopt or update a constitution so your company runs smoothly and stays compliant.

What Do “Memorandum And Articles Of Association” Mean Today?

Historically, a company’s “memorandum” set out formation details (like the company’s name, objects and capital), while the “articles of association” governed internal management (board powers, meetings, share transfers and more).

Australia moved away from that two-document model. For companies registered under the current regime, those functions are combined into a single document: the Company Constitution. Many businesses also rely on the Corporations Act’s default “replaceable rules” for day‑to‑day governance, either on their own or alongside a constitution.

You may still encounter “memorandum and articles” where:

• An older Australian company was incorporated under previous legislation and retains legacy documents (many were later converted or replaced).
• You’re reviewing an overseas company’s paperwork (for example, a UK parent or investor) that still uses the UK model.
• Historic documents were never updated after legislative reforms, even though the company now operates under a constitution framework.

For new Australian companies, expect a single, modern constitution. It’s the rulebook that sets out how decisions are made, how shares are handled, and how the board and shareholders interact under Australian law.

One important clarification: your constitution is not automatically lodged or published as a public document. Instead, it operates as a contract between the company and its members under the Corporations Act. You’ll still receive public company details such as your ACN and your ASIC registration records, but your constitution typically sits with the company’s internal records.

Company Constitution Vs Replaceable Rules: What’s The Difference?

When you register a company in Australia, you can rely on the replaceable rules in the Corporations Act, adopt your own Company Constitution, or do both (adopt a constitution that builds on or modifies the replaceable rules). Here’s how to think through the choice.

Replaceable Rules (Pros And Cons)

The replaceable rules are a set of default management rules embedded in the Corporations Act. They cover things like appointing directors, meetings, share transfers and dividends.

Pros:

• No drafting required for a baseline governance framework.
• Kept up to date by legislation (you don’t need to amend a document when the law changes).

Cons:

• They’re generic-fine for “average” needs, but they won’t reflect your company’s specific ownership, funding or control arrangements.
• They may not go into the practical detail founders and investors expect for real‑world decision‑making.

Company Constitution (Pros And Cons)

A tailored constitution is drafted for your business model and growth plans. It can supplement or entirely replace the replaceable rules.

Pros:

• Custom rules on director appointments, voting thresholds, pre‑emptive rights, share classes and decision‑making.
• Clarity and alignment among co‑founders and investors about “how things work,” which helps minimise disputes.
• Helpful when raising capital or issuing new shares-investors often expect robust and clear governance rules.

Cons:

• Needs to be drafted and adopted properly, and updated as the company evolves.
• As a legal document, precise wording matters. Ambiguity can create gaps or unintended outcomes.

Most serious ventures adopt a Company Constitution early. If you’re scaling, seeking investment or issuing different classes of shares, a constitution is almost essential so your governance matches your strategy.

What Goes In A Modern Company Constitution?

A contemporary constitution combines the core topics that “memorandum and articles” used to cover into a single, streamlined document aligned with the Corporations Act. Every company is different, but you’ll commonly see the following areas.

1) Shares And Share Classes

• Issue and rights attached to each class of shares (for example, ordinary shares, preference shares or non‑voting shares). If you plan to use multiple classes, it’s worth reading about different classes of shares and how each class participates in dividends, voting and exits.
• Pre‑emptive rights or other controls on issuing new shares so existing shareholders can maintain their percentage if they choose.
• How and when shares can be converted from one class to another, and the process for buy‑backs or redemptions where applicable.

Note: “Authorised share capital” isn’t a current concept under Australian company law. The focus is on the number and class of shares issued and the rights that attach to those shares.

2) Transfers, Pre‑Emption And Exit Mechanics

• Transfers of shares (including any approvals and processes to register transfers).
• Pre‑emptive rights, and common exit provisions such as tag‑along and drag‑along rights to help coordinate sales of the company.
• How the constitution interacts with founder or employee equity arrangements (good leaver/bad leaver concepts often sit in separate agreements, but should dovetail cleanly with the constitution).

3) Directors, Decision‑Making And Meetings

• Appointment and removal of directors; quorum and voting requirements at board meetings.
• Delegation of authority to committees or executives, and any decisions reserved for shareholder approval.
• How documents are executed by the company (often aligning with section 127 of the Corporations Act).

4) Shareholder Meetings And Resolutions

• Notice periods, quorum, proxies and voting thresholds.
• Matters requiring ordinary versus special resolutions (for example, adopting or changing the constitution generally requires a special resolution of members).

5) Authority To Bind The Company

• Who can sign and commit the company in the ordinary course-this usually references the Corporations Act and clarifies internal delegations consistent with section 126.

6) Dividends And Distributions

• Board discretion and the process for declaring dividends in line with the Act.
• How different classes of shares participate in dividends and other distributions.

7) Administrative Clauses

• How notices are sent and when they take effect, often tied to what counts as a business day.
• Register and record‑keeping requirements, and how conflicts of interest are managed.

If you’re inheriting legacy “memorandum and articles” language, it’s a good idea to have a lawyer translate those provisions into a current, cohesive constitution. This helps you avoid conflicts with the Corporations Act and ensures the document reflects how you want your business to operate.

Do You Ever Need Memorandum And Articles In Australia?

For new Australian companies, no-you won’t create a separate memorandum and articles. Your rules live in your constitution (or the replaceable rules).

However, you may still need to deal with “memorandum and articles” in a few scenarios:

• Older Australian companies: If your company predates the current regime, you might still have legacy documents. You can modernise by adopting a new constitution and retiring outdated provisions to remove uncertainty.
• Foreign companies: If a parent, subsidiary or investor is incorporated in a jurisdiction that uses memorandum and articles (for example, the UK), you’ll see those documents when negotiating deals. Make sure your Australian constitution works coherently with group policies and any cross‑border arrangements.
• Due diligence: If you’re buying or investing in a company, you’ll review its governance documents-whether they’re called a constitution or memorandum/articles-because they dictate control, decision‑making and exit mechanics.

In every case, the goal is the same: ensure the document governing your company reflects your ownership, funding plans and day‑to‑day operations-and that it’s consistent with Australian law.

How Do You Adopt Or Update A Constitution? (Step‑By‑Step)

Whether you’re moving off the replaceable rules, converting legacy “memorandum and articles,” or updating a dated constitution, here’s a practical roadmap.

Step 1: Map Your Governance Needs

Think about your shareholder mix (now and in the next 12–24 months), investor expectations, whether you need multiple classes of shares, and any decisions that should be reserved to shareholders. This planning helps your constitution fit your strategy rather than the other way around.

Step 2: Draft A Tailored Constitution

Have a constitution drafted (or reviewed and updated) to reflect your requirements and to align with the Corporations Act and your commercial plans. If you’re moving from old “memorandum and articles,” a clean, modern rewrite usually beats patchwork amendments.

If you’re starting fresh, you can also adopt a constitution as part of registration or soon after. Getting it right early can prevent disputes and friction later.

Step 3: Board Review And Recommendation

Your directors should review and recommend the draft to shareholders. This commonly involves a formal board endorsement, which you can document with a simple board resolution or a directors’ resolution to put the constitution to members.

Step 4: Member Approval (Special Resolution)

Adopting or amending a constitution typically requires a special resolution (at least 75% of votes cast). Follow notice and meeting requirements in the Corporations Act and your current rules, and keep clear records of the resolution and the date it takes effect.

Step 5: Implementation And Housekeeping

• Circulate the final, signed constitution to directors and members and store it with the company’s register.
• Update internal delegations and board charters to match the new rules.
• Make sure execution processes align with section 127 and your internal authority rules under section 126.

Step 6: Keep It Current

Revisit your constitution when your cap table changes, you issue new classes of shares, or you bring in investors. If your current setup no longer matches your operations, it’s time to update.

How A Constitution Interacts With A Shareholders Agreement

Many companies also put a Shareholders Agreement in place. This private contract works alongside your constitution and can include more detailed commercial terms-such as vesting, information rights and founder leaver provisions.

As a rule of thumb:

• Constitution: Your governance rulebook under the Corporations Act, binding the company and members.
• Shareholders Agreement: A private contract among shareholders (and often the company) setting out commercial deals and investor protections.

They should be consistent. If there’s a conflict, the constitution generally governs internal management, so align the two carefully.

Common Follow‑On Questions

Do I need to file my constitution with ASIC? For proprietary companies, the constitution is usually kept with the company’s records rather than lodged publicly. You should, however, keep it on hand and ensure directors and members have access to it.

Can I rely on the replaceable rules now and adopt a constitution later? Yes. Many startups begin with replaceable rules, then adopt a tailored constitution as they grow, change their share structure or raise capital.

What about share transfers? Your constitution should clarify how transfers are approved and recorded. If you’re working through a change of ownership, it can help to understand the general process for moving shares, which you can compare with your document before you actually proceed.

Key Takeaways

• Australia no longer uses separate “memorandum and articles of association” for new companies-your rules live in a single Company Constitution or the Act’s replaceable rules.
• A tailored Company Constitution gives you custom rules for shares, decision‑making and exits-especially important if you plan to raise capital or issue multiple share classes.
• Your constitution should address share classes, transfers and pre‑emption, board powers, meetings, execution under section 127, authority under section 126, distributions and admin matters like notices and what counts as a business day.
• If you’re dealing with an older Australian company or a foreign company, you may still see legacy “memorandum and articles”-consider modernising or mapping those provisions into a current constitution.
• Adopting or changing a constitution involves planning, drafting, a board recommendation and a special resolution-record everything properly and keep the document up to date.
• A Shareholders Agreement usually sits alongside the constitution to cover detailed commercial rights among shareholders-make sure they align.
• If you’re just setting up, you can adopt a constitution at registration or soon after to avoid headaches later.

If you’d like a consultation on updating legacy “memorandum and articles” or adopting a modern Company Constitution in Australia, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.