A Memorandum of Association (aka MoA) refers to the organization\u2019s charter. In general, it acts as a legally binding document drafted during the registration process of an organization to specify its association with shareholders, and it defines the objectives for which the organization has been formed. The organization is liable to engage with only those undertakings that are cited in the MOA. As such, these documents underpin an operational framework for the company. This write-up pens down all the detail around memorandum of association under companies act 2013. <\/p>\n\n\n\n
Memorandum of association under companies act 2013 aids the shareholders, creditors & other individuals associated with the company to know the fundamental rights and powers of the organization. Also, the contents under the MoA aid the prospective shareholders in making informed decisions regarding the investment in the company. A minimum of two subscribers are needed to sign the MOA in the case of a private ltd company. Similarly, at least seven members are required to sign the MOA in the case of a public ltd company.<\/p>\n\n\n\n
Following are the clauses that together constitute the Memorandum of Association of any legally binding company. <\/p>\n\n\n\n
This clause defines the company’s name.\nThe company’s name ought not to be similar to any existing entity. The name\nclause mandates the private company to affix ‘Private Limited’ at the end of\ntheir name. The same is also true for the public limited company.<\/p>\n\n\n\n
This clause defines the state’s name in\nwhich the company’s registered office is situated. This aids to determine the\njurisdiction of the RoC, i.e. Registrar of Companies. The company must share\nsuch a location with the RoC within 30 days from the company’s date of\nincorporation.<\/p>\n\n\n\n
The clause defines the objective with\nwhich the entity is established. The objectives can be divided into the given\nthree subcategories:<\/p>\n\n\n\n
Main Objective:<\/em><\/strong> It specifies the primary business of the\ncompany<\/p>\n\n\n\n Incidental Objective:<\/em><\/strong> These objectives serve as an ancillary\nobjective that aid in accomplishing the primary company\u2019s object. <\/p>\n\n\n\n Other objectives:<\/em><\/strong> Any\nother objects which the organization might pursue and not included in above (a)\nand (b)<\/p>\n\n\n\n It defines the members’ liability in the\ncompany. It sets out the liability of the members serving the company. In the\ncase of an unlimited company*,<\/em><\/strong> the members’ liability is unlimited;\nmeanwhile, in the case of a shareholding-based company, the members’ liability\nis restricted to the extent of the amount unpaid on their share. Likewise, the\ncompany is limited by guarantee; the shareholders’ liability is limited by the\namount each shareholder has agreed to contribute.<\/p>\n\n\n\n An unlimited company<\/em><\/strong>* refers to a type\nof private company. It bears similar characteristics to a limited company. But\nthe members of such a company have unlimited liability. This indicates that\neach shareholder is liable for the company’s debts in case of insolvency or\nwinding-up. <\/p>\n\n\n\n This clause defines the max. capital that a\ncompany can procure, which is legally known as the authorized\/nominal capital\nof the company. This also defines the division of said capital amount into the\nno. of shares of a fixed amount each.<\/p>\n\n\n\n The company’s memorandum shall be in standard\nforms cited in Tables A, B, C, D & E in Schedule I as may be applicable to\nsuch an entity.<\/p>\n\n\n\n Any provision cited in the memorandum or\narticles, in the case of a company limited by guarantee and lacking a share\ncapital, purporting to give any person a right to participate in the divisible\nprofits of the entity otherwise than as a member, shall be void.<\/p>\n\n\n\n A company has right to amend the norms of\nits memorandum via a special resolution and after adhering to the procedure\ncited in section 61.<\/p>\n\n\n\n Any alteration to the company’s name\nshall be subject to the provisions cited under subsections (2) and (3) of\nsection 4 & shall not attain legal\nstatus in the absence of writ permission conferred by the central government<\/p>\n\n\n\n (2) Any change in the company\u2019s name\nshall attract the provisions of subsections (2) and (3) of section 4 and shall remain\nineffective except with the approval of the Central Government in writing: <\/p>\n\n\n\n Provided that no such approval will be\nimperative where the only modification in the company\u2019s name is the deletion or\naddition thereto of the term- Private, consequent of any one class of entities\nin pursuant to the provisions cited under this Act<\/em><\/strong><\/p>\n\n\n\n (3)\nWhen any change in the company’s name is made as per sub-section (2), the\nRegistrar shall add the new name in the companies’ register and discard the old\nname. <\/em><\/strong><\/p>\n\n\n\n After this, Registrar shall issue the new\nincorporation certificate with the new name, and the change in the name shall\nbe effective on the issuance of such a certificate.<\/p>\n\n\n\n The Alteration of the Registrar in terms\nof place of registered office’s location from one state to another shall not\nhave any legal effect unless the Central Government in writing authorizes it. <\/p>\n\n\n\n The Central government may not consider\nthe application as per sub-section (4) within a timeline of 60 days and before\nissuing its order may satisfy itself that the change has the permission of the\ndebenture-holders, creditors, and other individuals concerned with a company or\nthat the company has made the relevant provision either for the discharge of\nall its debts and duties or the sufficient security has been rendered for such\ndischarge.<\/p>\n\n\n\n Save as available in Section 64, a\ncompany shall, on account of any alteration of its memorandum file with the\nRoC-<\/em><\/strong><\/p>\n\n\n\nLiability Clause<\/h3>\n\n\n\n
Capital Clause<\/h3>\n\n\n\n
Provisions\nrelating to the Alteration of memorandum<\/h2>\n\n\n\n