MEMORANDUM OF ASSOCIATION

INTRODUCTION

 Defined in 2(56) of Companies Act 2013

 Constitution of the Company
 Foundation on which the entire structure of company stands
 Maintain relation with outer world and company
 Consisting 6 major contents-Name, object, registered office, liability, subscription and capital
of company.

PURPOSE

 Shareholder may know the field in which their funds are going to be used.
 Contemplate the risk involved in their investment.
 Outsider may know about the objective of the company and can insure that contract they
are entering in is according to the object clause of MOA.

CONTENTS-

NAME CLAUSE-
 Company being a legal person must have its name.
 Case-Osborn vs. Bank of U.S-The name of the company at the time of incorporation is a
symbol of its personal existence.
 Company is free to choice its name but can put name which is undesirable According to
Central Government.
 Should not contravene the Provisions of Emblem and Names(Prevention of Improper use)
Act 1950.
 It should not include “cooperative” in it and Private Company can’t write ‘National’ within its
name.
 Name of company must not be Identical or too nearly resembles the name by which a
Company already exist.
 Required approval from the ROC before confirming the name.

Rectification of the name(SECTION 16)

 In opinion of Central Government if name is Identical or resembles with the name of the
existing company, within three months from the direction, name of the incorporating
company must be changed through simple resolution.
 After changing the name, this will be informant to ROC within 15 days from change along
with the order of Central Government.
 IF anyone contravene the provision of Section 16 will be punished with fine between 5
thousand to one lakh Rupees.
USE OF Suffix/Preffix WITH NAME OF COMPANY-

S.NO KEY WORDS AUTHORIZED

CAPITAL
1. Corporation 25 CRORE
2. International,Globe,Global,Continental,Worl,Overseas 5 Crore
Asiatic,Asia-Preffix
3. Any word in Column 2 with or without bracket 2 crore
4. Hindustan,Bharat,India,Indo,Bhartiya, Bharatvarsh- 2 Crore
Preffix
5. Any word in Column 4 with or without bracket 25 lakhs
6. Industries/Udyog 5 Crore
7. Enterprise,Products,Business,Manufacture,Venture 50 Lakhs

 Using Word Limited with the name of Company-Permission from the Central Government is
Required.
 No Specific Criteria is Given from Using term Limited but Under Section 8, Central
Government will provide a licence.
 Name of the Company Must be written in front to the registered office. Non-Compliance of
this rule will be punished in accordance with the provision of Section 8.

Change of Name-(SECTION 13(2)

 By Passing Special Resolution in Annual General Meeting.

 Approval of Central Government. -(Delegated this power to ROC)

Venture Capital Company-

 These are the companies which supports financially to small scale industries.
 These companies are allowed to use word Venture Capital so as they may clearly identified
as the Venture Capital Service Provider.

REGISTERED OFFICE
Section 12(1) of Companies Act 2013

 To be mentioned in the MOA-Address of the Registered office of the Company.

 Can be filed Separately in Form 18 Within 13 days from Incorporation or when it
commences business.
 For the purpose of Communication and notices.
Change of Registered Office
1.Within the same City or town can change easily.
2.City to another city within states- Special resolution and notice also be given to ROC with
30 days of Such Change.

 Non-Compliance of Provision-fine up to 1 thousand- 1 Lakh Rupees for everyday till

default continues.
3.From the jurisdiction of one registrar to another within one state-Confirmation by the
Regional Director is required. (Section 12(5))

 Confirmation must be informed within 4 weeks to ROC.

4.From one State to another state-

 Has to alter MOA

 Through Special Resolution
 Permission of Central Government
 Before granting permission, sufficient notice must be given to share-holders,
debenture holders or other who have interest in company and whose interest will
affect by such change.
 Creditors can show their objection.
 Confirmation should be informed in printed form to ROC within 3 months.

OBJECT CLAUSE
1.Main Object-The ultimate object of the company.
2.Other Object-objects other than main object
3.State to which object extends-territorial limits
Purpose-
1.Subscriber may know where the invested money is put which ensures protection of
shareholders.
2.Ensures protection of creditors.
3.Serves public interest.
Alteration –(Section 13)
A.Procedural
 Special resolution should be passed.
 Confirmation by the Central Government.
 Before confirmation central government will be satisfy that-
 Sufficient notice is to be given to each share-holder and to the person whose interest
can be affected through such alteration.
 Objections on the proposed alteration has been properly disposed off.

B. Substantive
 Company may alter object for following purpose-
 Carry on business more economically and. efficiently
 In order to enable company to carry on it main purpose with new and improved
manner.
  To Enlarge the local area of its operation.
 Carry on a business which under the existing condition may be conveniently and
advantageously be combined with current business.
 Allowed to restrict or abandon any object of MOA
 Sell or dispose any undertaking of company.
 For amalgamation.
LIMITED LIABILITY CLAUSE

 Specify in MOA that company is limited by shares of Guarantee.

 Clause in MOA must contain a provision that the liability of a company is limited.
 If company is limited by shares then no member can call upon to pay more than the
amount invested.
 If Company is limited by guarantee, person cannot be called upon to contribute
more than the amount he assured.
 A company can alter its liability clause for enhancing liability of its members and to
compel them to purchase more shares in the company.
CAPITAL CLAUSE

 Specify the amount of the nominal or authorized capital with which company
proposes to be registered.
 Value of shares.
 Capital of company divided in two parts-
 Equity Share capital
 Preference share capital

Alteration-(Section 61)

 Ordinary resolution.
 Reasons of alteration-
 Increase share capital and issue new shares.
 Consolidate existing shares into large denomination.
 Sub divide shares.
 Convert fully paid up shares into stock or vice-versa.
 Cancel unissued shares.

ASSOCIATION CLAUSE-
Known as subscription clause
State the details of the members signed the MOA and AOA at the time of incorporation.
Detail of Signature witness who witnessed the signing of Members.
Name, Address, Occupation to be mentioned.
 ARTICLE OF ASSOCIATION
 It is defined in Section 2(5)
 Contain Internal regulations of the company
 Deals with internal affairs of the company
 Maintains relation of company with their employees.
 Easily amendable.
 Bye-laws of company.
 In case of conflict between MOA & AOA, MOA will prevail/
Registration(SECTION 7)

 Either Company may register AOA with ROC, signed by the members.
 Or, Table A in Schedule I will apply.
Form of AOA

 Must be registered
 Must be printed
 divided in paragraphs
 Numbered properly
 Signed by subscribers in front of at least one witness
 Details of signatory.

Contents-

 Approval of Preliminary contracts.

 Capital rights, their variations, conditions.
 Allotment, call, transfer/transmission of Shares
 Share Certificate
 Conversion of share in stock
 Voting rights, proxies
 Meetings,
 Dividends
 Debentures and charges
 Account & audit
 Winding up
 Indemnification process.
Alteration of AOA
A.
a) proposal has to approve by Directors
b) Directors will decide date and time of meeting
c) Authorize secretary to organize meeting
d) Draft the special resolution and explanatory statement.

C. Resolution should be passed in General meeting held on decided date.

D. After passing the resolution within 30 days-

a) Inform ROC
b) Fill form 23 of {Companies (Central Government) General rules and Forms 1956 Act}
c) Fees should be paid which is mention in Schedule X of Companies Act 2013.

E.In case where alteration is made to convert a Public Company into Private Company-
a) Company should fill form 1-B to the Regional Director for his approval.
b) Within 3 months from the date of passing the Special resolution.
F. After approval, alteration approval should be informed to ROC within 15 days.
G. Alteration should be noted in each copy of AOA.

Limitations on Alteration-

 Do not exceed the Power conferred by MOA.

 Must not be inconsistent with the Provisions of Companies Act 2013
 Must not be inconsistent with the order of National Company Law Tribunal.
 Motive of Alteration must be bona-fide.
 Does not contain anything illegal.
 Must not be against Public Policy.
 Alteration for increasing the liability must be consented by the all shareholders.
 Company cannot justify a breach of contract by altering the AOA.
 Cannot convert reserved liabilities to unreserved liabilities.