Assignment On

Memorandum of Association it’s Contents

&
Importance for Incorporation of a Company

Submitted to
Tasnuva Sharmin
ASST. PROFESSOR, DEPARTMENT OF LAW

Notre Dame University of Bangladesh

Submitted By
Rajia Akter Meru- 201010018
Shabah Wasim Suha- 201010032
Fahim Khan- 193010010

Submission Date: 07 October 2021

 LETTER OF TRANSMITTAL

Date: 07 December 2021

Tasnuva Sharmin
ASST. Professor
Department of Law
Notre Dame University Bangladesh
2, Arambag, Motijheel, GPO Box-7,
DHAKA-1000, BANGLADESH

Subject: Letter of Transmittal

Honorable Faculty,
With due respect, we, the students of the BBA 16 THA batch have made an assignment
about a topic according to the (Company Law- MoA).
Though we are on a learning curve, we have tried our best to do this assignment
appropriately. So, it was an interesting experience. Thank You for your supportive
consideration. Without your inspiration, this assignment would have been an incomplete
one.
Lastly, thank you once again, mam if you please give your judicious advice on effort.

Sincerely
On Behalf of “Group ”
Rajia Akter Meru (201010018)

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 Table of contents

Page Contents Cover by Remarks

No.
4 Introduction/What is Fahim Khan-
Memorandum of Association 193010010

5 The Contents of MoA Shabah Wasim

Suha - 201010032

7 Importance of MoA Fahim Khan-

193010010

8 Importance for Incorporation Rajia Akter Meru

of a Company - 201010018

9 Conclusion Rajia Akter Meru

- 201010018

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 Introduction

A Memorandum of Association is a legal document that describes the purpose for which the company is
formed. It defines the powers of the company and the conditions under which it operates. It is a document
that contains all the rules and regulations that govern a company’s relations with the outside world. The
Memorandum of Association is a document that contains the fundamental rules regarding the constitution
and activities of a company.
Every company must have a Memorandum of Association that defines the scope of its operations. It is a
foundation on which the company is made. The entire structure of the company is detailed in the
Memorandum of Association.

A Memorandum of Association (MoA) represents the charter of the company. It is a legal document
prepared during the formation and registration process of a company to define its relationship with
shareholders and it specifies the objectives for which the company has been formed. The company can
undertake only those activities that are mentioned in the Memorandum of Association. As such, the MoA
lays down the boundary beyond which the actions of the company cannot go.

The memorandum of association (memorandum) is a legal document formulated as part of the

incorporation process of companies. The significance of the memorandum lies in the fact that it comprises
the objects clause of a particular company. The objects clause defines the scope and nature of businesses
that a company wishes to undertake at the time of incorporation. By listing out the nature of businesses in
the objects clause, a company limits itself within the scope of the objects clause. This limitation creates
difficulties for companies when they desire to expand their business into new markets and industries.
However, the problem can be easily resolved by amending the memorandum.

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 Contents of MoA

The format of an MoA is depending upon the type of company. A Memorandum of Association
is an essential document that contains all the details of the company. It governs the relationship
between the company and its stakeholders.
The contents of the memorandum. It details all the essential information that the memorandum
should contain.

Name Clause
The first clause states the name of the company. Any name can be chosen for the company. But
certain conditions need to be complied with. Every company name must end with Limited (Ltd.).
No name of the company should be the name of the existing company, king, queen, president,
prime minister, Father of Nation, or anything that signifies government sponsorship.

Registered Office Clause

This clause specifies the name of the State in which the registered office of the company is
situated. This helps to determine the jurisdiction of the Registrar of Companies. This clause
should include the address and situation of the company, which is mentioned in the registration.

Area of Business
It should include the current and potential areas of the business. It should be written carefully
because it made the boundary around the business operations.

Objects or Objective Clause

This clause is the most important clause of MA. The objects clause, also called the objective
clause, is considered the most important in the MOA.
It defines and limits and identifies the scope of the business. Beyond these identified scopes, the
business can’t move. For example, If a company says its objective is to do only Shoe business, it
cannot do another business. It details the company's scope of activity for the members and
explains how the members' capital will be used.

Liability clause
The liability clause explains the duties and responsibilities of the Owners. If the company is
limited by shares, the liability that each member faces can be no more than the face value of
shares that he or she holds. If it's a company that's limited by guarantee, this clause must define

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how much liability each company member holds. If it's an unlimited company, this particular
clause would not be included in the MOA.

Capital Clause
The capital clause lists information about the total capital held by the proposed company. This
amount is called the company's authorized capital. The way the capital is divided into equity
share capital and preference share capital also needs to be listed in the capital clause. The
number of shares the company puts in equity share capital and preference share capital, their
value, needs to be included in the MOA.

Consent Clause
An objects clause is a provision in a company’s Memorandum of Association stating the purpose
and range of activities for which the company is carried on. The purpose of the object clause is to
outline and limit the activities which the company is permitted to undertake.

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 Importance of MoA

The Memorandum of Association is the Constitution of the company, prepared at the time of
registration and periodically updated to incorporate changes. It is a legal document that defines
the very foundation of the company. It clearly defines the span of operations and functions of the
company. This document has full control over the functioning of the company. The company
cannot perform activities outside this document limits unless necessary amendments have been
made.
It contains all the fundamental details about the establishment and its location, the defined scope
of business activities and objectives, extent of authority, legal rights of the company, and all
other information needed to register the company. This document also defines the boundary for
the registered company.
So, here are some point’s

● The MOA is a fundamental and vital document required for the registration of a
company.
● It clearly defines the span of operations and functions of the company.
● It brings about transparency and is the medium via which all the stakeholders get full
information regarding the company.
● This document defines the liabilities of every shareholder of the company. This helps in
understanding the role & responsibilities of each person.

The use of Memorandum of Association

● It defines the scope & powers of a company, beyond which the company cannot operate.
● It regulates the company’s relationship with the outside world.
● It is used in the registration process, without it the company cannot be incorporated.
● It helps anyone who wants to enter into a contractual relationship with the company to
gain knowledge about the company.
● It is also called the charter of the Company, as it contains all the details of the company,
its members, and their liabilities.

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 Importance for Incorporation of a company

The Memorandum of Association is considered as the constitution of a company. It provides the

foundation to the structure or the building of the company. The memorandum of association is
defined as a company’s charter. It defines the limitations of a company’s powers.

The MoA is a document containing the objects of the company, the businesses/activities which
the proposed company wants to carry out. This is the overarching document regulating the
company's activities, as it identifies the possible scope of the company's operation. If a company
acts beyond the stated object, then the action will be regarded as ultra vires to the MoA or
beyond the legal authority of the Company, and accordingly, be void.
In addition to MoA, another instrument that supplements an MoA in regulating a company's
functions, working methodology, and goal is its Articles of Association or AoA. It defines how
activities are to be managed within the company, including the process for appointing directors
and the handling of financial records. It can be regarded as a user's manual for a company,
outlining the procedures for accomplishing necessary day-to-day operations of the Company.

⧫ Determines the relationship of the company with outsiders

The sole purpose of this document is to disperse the necessary information to the shareholders,
creditors, and other stakeholders. It showcases the range of enterprise and its powers.

the memorandum of association with the registrar of the companies to get it incorporated. For
this, it should be signed by at least 7 persons in the case of a public company and 2 persons in the
case of a private company.

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 Conclusion

A Memorandum of Association (MoA) represents the charter of the company. It is a legal

document prepared during the formation and registration process of a company to define its
relationship with shareholders and it specifies the objectives for which the company has been
formed. The format of an MoA is depending upon the type of company. A Memorandum of
Association is an essential document that contains all the details of the company. The
Memorandum of Association is the Constitution of the company, prepared at the time of
registration and periodically updated to incorporate changes. It is a legal document that
defines the very foundation of the company. Therefore, utmost precision and clarity need to be
taken at the time of drafting the MOA.

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 Reference

Commercial Law & Business Law

Prof. Sakti Mukherjee
Arun Kumar Sen
Jitendra Kumar Mitra

● upcounsel.com/explain-the-contents-of-memorandum-of-association
● ipleaders.in/memorandum-of-association-2-Meaning-of-Memorandum-of-
Association
● tbsnews.net/thoughts/memorandum-and-articles-association
● legalraasta.com/memorandum-of-association

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