Doctrine of Constructive Notice

A registered company's Memorandum and Articles are not private documents locked away in a company's own files — Section 399 of the Companies Act, 2013 (and the corresponding rules governing the electronic registry maintained by the Ministry of Corporate Affairs) makes them public documents, open to inspection by any member of the public on payment of the prescribed fee, and accessible today through the MCA21 electronic portal. Because these documents are a matter of public record in this way, the law applies the doctrine of constructive notice: every person who deals with a company is deemed, in law, to have knowledge of the contents of its registered Memorandum and Articles, whether or not that person has actually taken the trouble to read them.

The practical effect of the doctrine is significant, and often surprising to a first-time reader. If a company's Articles limit a particular officer's authority to enter into contracts above a certain value, or require a particular internal approval before a certain kind of transaction can be undertaken, an outsider dealing with the company cannot later claim ignorance of that limitation merely because they never actually inspected the Articles — the law treats them as having constructive notice of it regardless. This is very different from ordinary contract law, where a party is usually only bound by terms it actually knew or reasonably ought to have known from the specific dealings in front of it; here, the mere fact that the Memorandum and Articles are on the public file is enough to fix every outsider with deemed knowledge of their contents. …