Both M&A and Constitution are company bylaws, but what are the differences?
Both Are Constitutional Documents
- M&A (Memorandum & Articles of Association) and a Constitution are both constitutional documents of a company
- They govern how a company is managed and operated
Different Legal Frameworks
- M&A was adopted under the Companies Act 1965
- A Constitution is adopted under the Companies Act 2016
Can an M&A Be Amended or Removed?
- Companies that are still using an M&A
- May choose to amend or revoke it according to their needs
How to Convert from M&A to a Constitution?
- If a company wishes to adopt a Constitution
- It must first revoke its existing M&A
- Only then can a new Constitution be adopted
What If a Company Has Neither?
- The company will not be adversely affected
- Companies without an M&A or Constitution
- Will operate according to the default provisions under the Companies Act 2016
Why Adopt a Constitution?
- To customize governance rules based on the company's needs
- To clearly define the rights and responsibilities of shareholders and directors
- To reduce the risk of future disputes
- To improve corporate governance and management efficiency
Summary
- M&A is the constitutional document used under the Companies Act 1965
- Constitution is the constitutional document used under the Companies Act 2016
- Companies may amend, revoke, or adopt a Constitution based on their needs