‘Memorandum of association’ is the document which contains particulars of the specific object for which a company is established, and covering the whole scope of operation. Beyond which it’s not legal to go we can say any act beyond the memorandum of association is ultra vires and void ab- initio. The first step in the formation of the company is t prepare a document known as the memorandum of association. It’s preferred to be an essential document with the affairs of the company. Every company registered under the companies act must have a memorandum of association. The company is born from its memorandum hence it’s also called “the charter” or “life-giving document” of the company. Memorandum of association is also called ‘MOA.’
Registration of memorandum of association:- memorandum f association is registered at the time of incorporation company. It clarifies the ground of a company and its very purpose of formation and relationship with shareholders. Memorandum of association shall be registered n prescribed manner specified in tables A, B, C, D and E in the schedule I as may apply to such company.
According to section 4 of the companies act, 2013, the memorandum of association of every company must have some clause. These clauses are also known as ‘condition in the memorandum.’ The memorandum is divided into following five clauses:
- Name clause [section 4(1),(2),(3)]:-
The first clause of the memorandum states the name of the proposed company. It provided in the clause that it shall not be identical with or resemble too nearly to the name of an existing company registered under this act or any previous company law.
Of any such manner that will constitute an offense under any law for the time being in force or undesirable n the opinion of the central government unless the previous approval has been obtained from the central government.
- The registered office of the company (section12):-
The second clause provides that a company shall on and from 15day of its incorporation and at all times thereafter have a registered office of capable of receiving and acknowledging every communications and notice as may be required to address it. If there is any alteration of the situation of the registered office, verified in the manner prescribed after the date of incorporation of the company shall be given to the registrar within 15 days of the change who shall record the same. Also if any default is made in compliance with the requirements of this section the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees.
- The objective clause:-Objective clause is the most important clause in the memorandum of association it prescribes the object for which the company is proposed to be incorporated and in any matter considered necessary in furtherance thereof. The only restrictions are that the objects should not go against any law of the land and the provisions of the Companies Act. They must not be immoral or opposed to public policy or fraudulent.
- The liability clause: – this clause has to state the nature of the liability that the members incur. The clauses clear the dust whether the liability of the members shall be limited, and, if., so, whether limited by share or guarantee.
- The capital clause:-the memorandum of association of a company, having a share capital, shall state the amount of the share capital with which the company is to be registered and the division thereof into shares of a fixed amount. The company can’t issue shares more than authorized for the time being by the memorandum of association.
Amendment or alteration in the memorandum of association:- section 13 of the companies ct deals with the alteration or amendment in a memorandum of association, for that purpose, a company may, by special resolution and after the complying with the procedure specified in the section, alter the memorandum of association.
- Any change in the name of the company shall not have effect except with the approval of the central government in writing.
- The amendment of a memorandum of relating to the registered office shall not have effect unless it is approved by the central government in writing.
- The central government shall dispose of the application within 60days.
Work of lawyer:- the memorandum of association is a document of utmost importance which signifies objective and legality of any company’s formation hereby lawyer can provide the best solution by taking help of MOA whether the company is working in power legally or illegally whether the acts are intra vires or ultra vires.
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