It is necessary for every company to get registered the Memorandum of Association and Articles of association with the Registrar of Companies. The registrar’s office is public office and on registration the Memorandum of Association and Articles of association becomes the public documents. So they are open and accessible to all.
On the payment of the nominal fee the document can be inspected by any one. Those dealing with the company whether a shareholder or an outsider is presumed to have read the two documents and understood their in true meaning. This deemed knowledge of the two documents and their contents is knows as the doctrine of Constructive Notice.
When a person deals with a company in a way, which is not in accordance with the provision of the Memorandum of Association or Articles of association or enters into a transaction which is beyond the scope of the power of the company he must take the consequences in respect of such dealing.
The doctrine of Constructive Notice is not a positive doctrine but a negative one. It acts like the doctrine of estoppel. It does not work against a company but only an outsider dealing with the company. It prevents him from alleging that he did not know that the Memorandum of Association and the articles rendered a particular act ultravires the company.
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