What is a Memorandum?

As one of the most common forms of communication within an office environment, the memo or memorandum serves as a quick note to convey information from one section of the company to another. A memorandum may be drafted by management and addressed to other employees or from a department head to the company at large. Generally, a memorandum will include a few basic elements, such as the name of the originator of the document, the intended recipient or recipients, the date of issue, the general topic, and the body of the document that contains the information to be shared. There are actually a number of different types of common memorandum style documents that are employed in the business world. One often utilized format is referred to as theMemorandum of Understanding. This document is used to define and document the perimeters of a working relationship between two parties. Generally, the body of this note addresses the main reason for the partnership, the anticipated outcome, and the general terms and conditions that will govern the business arrangement. In many cases, theMemorandum of Understanding serves as a precursor to a more formal contract. A Memorandum of Agreement, or MOA, is similar to the Memo of Understanding, in that the document is used to spell out the terms and conditions that will apply to all participants in a joint project. However, the MOA tends to go into more detail, outlining processes and procedure in addition to addressing the general perimeters of the working arrangement. Private Placement Memoranda is a common communication tool that is involved in securities offerings. This type of memorandum is normally addressed to a select number of accredited investors, and includes all pertinent details surrounding the sale of the security, including the final date that the offer will be honored. While not considered a contract, this form ofmemorandum is thought to be a more or less firm offer that precludes the actual financial transaction. The Memorandum of Association is a foundational document for many businesses of all sizes. Commonly referred to as The Memorandum, this document essentially defines the relationship between the company and the outside of the world. The contents of thememorandum touch on the relationship to clients, vendors, and distributors. In addition to defining relationships, this type of memorandum also indicates the amount of shares a company is authorized to

issue, and the range of operations that the company will engage in the pursuit of profitability. As a general tool of written communication or as a document with a specific purpose, thememorandum is a useful tool in just about any business setting that involves two or more parties. Today, the memorandum may be issued and stored as an electronic document, as well as in hard copy form.