Memorandum of Association

• WHAT IS MEMORANDUM OF ASSOCIATION ?
• PURPOSE OF MEMORNDUM
• CONENTS OF MEMORANDUM OF ASSOCIARION
  • [[#CONENTS OF MEMORANDUM OF ASSOCIARION#1. Name Clause:|1. Name Clause:]]
  • [[#CONENTS OF MEMORANDUM OF ASSOCIARION#2. Situation Clause:|2. Situation Clause:]]
  • [[#CONENTS OF MEMORANDUM OF ASSOCIARION#3. Object Clause:|3. Object Clause:]]
  • [[#CONENTS OF MEMORANDUM OF ASSOCIARION#4. Liability Clause:|4. Liability Clause:]]
  • [[#CONENTS OF MEMORANDUM OF ASSOCIARION#5. Capital Clause:|5. Capital Clause:]]
  • [[#CONENTS OF MEMORANDUM OF ASSOCIARION#6. Association or subscription clause:|6. Association or subscription clause:]]

WHAT IS MEMORANDUM OF ASSOCIATION ?

1. Memorandum of Association is the first essential documents in the formation of the Company.
2. contains the fundamental rules regarding the Constitution and activities of Company.
3. It is the basic document which law down how the Company is constituted and what work it shall undertake.
4. he purpose of MOA is to enable the members of the Company, its creditors and the public know what its powers are and what is the range of its activities .
5. The Memorandum contains rules regarding:
   1. the capital structure
   2. liability of the members
   3. the objects of the Company
   4. all other important matters relating to the Company.
6. It is the charter of the Company.
7. It lays down the area of operation of the Company.
8. It also regulates the external affairs of the Company in relation to the outsiders.

PURPOSE OF MEMORNDUM

1. To acquaint the prospective shareholders to know the field in which their money is going to
2. what risk they are undertaking in making investment.
3. Let the outsiders know certainly what the objects of the company.
4. Whether the contractual relation into which they contemplate to enter with the Company is within the objects of the Company.

CONENTS OF MEMORANDUM OF ASSOCIARION

1. Name Clause:

1. The clause contains the name of the company.
2. The name selected should not be identical with that of any existing company.
3. Also the name must not be one which is considered undesirable by the Central Government.
4. The name of the company should end with the word ‘Limited’ if it this public company
5. If it is private company the name should end with the words ‘private limited’.
6. The purpose of adding the word ‘Limited’ is to enable all those who deal with the company to know that the liability of the members is limited.

2. Situation Clause:

1. In this clause, the state in which the company’s registered office is located should be given.
2. the exact address within the state is not given and only the name of the state is given, To avoid any unnecessary legal formalities and expenses if there is a subsequent change in the address of the company.

3. Object Clause:

1. It should specify in unambiguous/CLEAR language the objectives for which the company is formed.
2. Great care would be taken in drawing up this clause, as the company will not be allowed to do any business which is not specifically mentioned here.
3. As it is difficult to alter the project clause later,
4. it is necessary that promoter’s should include in this clause, all possible types of business in which a company may engage in the future.

4. Liability Clause:

1. This clause states that the liability of members is limited to the face value of shares taken up by them.
2. If a member has already paid some amount on the shares, he can be called upon to pay only the unpaid amount of the shares.

5. Capital Clause:

includes:

1. particulars regarding the amount of share capital with which the company is proposed to be registered
2. the division for the capital into shares is fixed amount are included.

6. Association or subscription clause:

This contains a declaration by the subscribers to the memorandum. This declaration just precedes the names of the signatories to the memorandum.