‘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.’
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
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
- 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.