1.

Introduction:

In this Seminar topic we are going to study alteration of memorandum of association of the
company. For this purpose I will explain in short about Memorandum of association.

What is Memorandum of Association?

The Memorandum of Association is a document which sets out the constitution of the Company
and is therefore the foundation on which the structure of the company is based. It defines the
scope of the company’s activities and its relations with the outside world.

About MoA:

The first step in the formation of company is to prepare a document called the MoA. It is a
written document in fact memorandum is one of the most essential pre requisites for
incorporating a registered company under the act, this is evidence in section 12 of the act, which
provides a mode of forming an incorporated company and states in the case of a public company,
any 7 of more person and in the case of a private company, any two or more persons, associated
for any lawful purpose, may be subscribing their names to a Memorandum and complying with
the other requirements of this act in respect of registration, may from an incorporated company,
with or without limited liability.

To subscribe means to append one’s signature or mark a document as an approval or attestation

of its contents. According to section 2(28) of the company’s act MoA of the company as
originally framed or altered from time to time in pursuance of any previous company’s law or
this act.

This definition does not state the nature of this document nor is indicative of its importance.
Section 13 of the act specifies in clear terms the contents of this important document which is a
charter of the company.

MoA of a company contents the fundamental provisions of the company’s constitution it

contents the essential conditions upon which the company can be incorporated. In this respect, it
is company’s charter of its existence and operations and is of supreme importance in determining
its power. It defines as well as confines the powers of the company. It not only shows the objects
of formation but also determines the utmost possible scope of the operation beyond which is
actions cannot go. “THE MEMORANDUM OF ASSOCIATION”, observed palmer, “is a
document of great importance in relation to the proposed company”.
 2. Clauses under MoA

To study
 3. Alteration of Memorandum of Association

The MoA of a company may altered in the following respects:

1) By changing its name (Sections 21 to 24).

2) By altering it in regard to the State in which the registered office is to be situated or its
objects (Section 17).
3) By altering its share capital (Section 94).
4) By reorganizing its share capital (Sections 391 to 396).
5) By reducing its capital (Section 100).
6) By making the liability of directors unlimited (Section 322).

For the purpose of amendment different clauses of MoA are broadly classified into two parts,
namely,
A) Part relating to conditions, and
B) Part relating to other provisions.

The conditions part of the memorandum cannot be amended except by way of procedure
expressly lead down in the company’s act 1956 [See Section 16(1)].

The provisions relating to the name clause, registered office clause, the objects clause, limited
liability clause, Subscriber’s share clauseas provided in Section 13 of the Company’s Act, 1956
or any other specific provisions contained in the Act are to be registered as the conditions
contained in the memorandum [Section 16(2)].
For the alteration of those conditions in the Memorandum of Association, presubscribed
procedure is to be followed and strict compliance of the producer is demanded by law. Failure to
comply with the expressed provisions made under the Act for the purpose of alteration of the
conditions contained in the memorandum will be deemed as a nullity.

Other provisions which are found included in the memorandum including those relating to
appointment of a managing director or manager fall in the category of other provisions in the
memorandum [See Section 16(3)].
These may be generally altered in the same manner as the articles of the company unless there
are any specific directions as to the procedure to be followed made in the act.

Thus, procedure to be followed as provided in the articles is adhered to for this purpose. The
procedure for the alteration of the compulsory clauses or conditions of the memorandum is
discussed in detailed in the following chapter.