The document which is legal charter of a company that defines the limits of a company’s field of operation is known as

JAMB Accounting 2023 74 views

The document which is legal charter of a company that defines the limits of a company’s field of operation is known as

  1. articles of association
  2. equity share certificate
  3. memorandum of association ✓
  4. prospectus

Explanation

Memorandum of association is the constitution of a company. It defines what business activities the company can legally do and its fundamental rules. It’s filed with government during registration.

Articles of association cover internal management rules. Share certificates prove ownership. Prospectus is an advertisement inviting people to buy shares. None of these define operational limits.

Remember: Memorandum = what the company CAN do. Articles = how the company WILL operate internally.

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