What are you searching for? Help?

Login Open Demat Account

Products Stocks Mutual Funds IPO Resources Pricing English

Home Stock Market Guide Tax Memorandum Of Association

What is Memorandum of Association?

5paisa Research Team Last Updated: 26 Apr, 2023 04:17 PM IST 0:00 / 5:09

Lifecare IPO
Magenta
Want to start your Investment Journey?

+91 Enter Mobile Number

Open Demat Account

Content More About Tax

What is MoA?
Format of Memorandum of Association Section 80TTB
Objectives in registering MoA
Clauses and contents of Memorandum of Association
Section 80E
Advantages and Disadvantages of MoA
Conclusion
Section 80D Of Income Tax Act

What is MoA?
Form 27EQ
The Memorandum of Association (MoA) is a legal document that lays out the
framework for the establishment of a company. It is one of the essential documents
required to set up a company in many jurisdictions, including India, the United Form 24Q
Kingdom, and other common-law countries.
The MoA includes the company's name, registered office address, nature of business,
authorized share capital, and the names and signatures of the subscribers who are Form 10IE
the initial shareholders. It also outlines the company's objectives, powers, and
limitations, which the company must operate within.
Section 10(10D)
The MoA is crucial as it defines the company's scope of activities and helps protect
the shareholders' interests. Any changes to the MoA require approval from the
shareholders and regulatory authorities, depending on the jurisdiction's rules and
What are you searching for? Help? Login Open Demat Account
regulations. Form 3CEB

Products Stocks Mutual Funds IPO Resources Pricing English

Read More

Format of Memorandum of Association

The format of the Memorandum of Association may vary slightly depending on the
jurisdiction and the type of company being formed. However, generally, the following
information is included in the Memorandum of Association:

1. Name Clause: This clause specifies the name of the company that is being
formed.
2. Registered Office Clause: This clause specifies the registered office of the
company.
3. Object Clause: This clause specifies the main objects of the company and the
activities that it is authorized to carry out. It is important to note that the company
cannot engage in activities that are not specified in this clause.
4. Liability Clause: This clause specifies the liability of the members of the company.
It could be limited by shares or guarantees or unlimited.
5. Capital Clause: This clause specifies the amount of authorized share capital of the
company and the number of shares that can be issued.
6. Association Clause: This clause states the intention of the subscribers to form
the company and become members.

The format of the Memorandum of Association may also include other clauses that
are specific to the jurisdiction or the type of company being formed. It is important to
consult the relevant laws and regulations to ensure that the Memorandum of
Association complies with all the requirements.

Objectives in registering MoA

The objectives of registering the Memorandum of Association (MoA) are as follows:

Lifecare IPO
Magenta
1. To provide legal status: The MoA is a legal document that defines the scope of a
company's activities and helps provide it with a legal identity. It also helps establish
the company as a separate legal entity from its owners or shareholders.
2. To define the company's purpose: The MoA sets out the company's objectives
and the activities it is authorized to undertake. This helps to ensure that the company
operates within the scope of its objectives and complies with the applicable laws and
regulations.
3. To protect the interests of shareholders: The MoA outlines the rights and
obligations of the shareholders, which helps protect their interests. It also helps
prevent any unauthorized activities or decisions that could adversely affect the
shareholders.
4. To facilitate capital raising: The MoA specifies the authorized share capital of the
company, which helps investors understand the potential size of the company and
the amount of capital required for its operations. This helps in raising capital through
the issuance of shares.
5. To facilitate decision-making: The MoA helps in decision-making by outlining the
company's powers and limitations. It provides guidance to the management and
directors on the activities that the company can undertake, which helps them make
informed decisions.

In summary, registering the Memorandum of Association is a crucial step in the

formation of a company, as it provides legal status, defines the company's objectives,
protects the interests of shareholders, facilitates capital raising, and facilitates
decision-making.
Clauses and contentsWhat
ofareMemorandum
you searching for? of Help? Login Open Demat Account

Association Products Stocks Mutual Funds IPO Resources Pricing English

The clauses of the Memorandum of Association (MoA) may vary depending on the
jurisdiction and the type of company being formed. However, some of the common
clauses that are typically included in the MoA are as follows:

● Name Clause: This clause specifies the name of the company and ensures that
the name is unique and does not violate any existing trademarks or laws.
● Registered Office Clause: This clause specifies the address of the registered office
of the company, which is the official address for communication and legal purposes.
● Object Clause: This clause specifies the main objectives of the company and the
activities that it is authorized to undertake. It outlines the scope of the company's
operations and ensures that it operates within the legal and regulatory framework.
● Liability Clause: This clause specifies the liability of the members of the company.
It could be limited by shares or guarantees or unlimited.
● Capital Clause: This clause specifies the authorized share capital of the company
and the number of shares that can be issued. It also outlines the rules and
procedures for issuing and transferring shares.
● Association Clause: This clause states the intention of the subscribers to form the
company and become members.
● Alteration Clause: It outlines the procedures and requirements for making any
changes or alterations to the MoA.
● Winding-up Clause: This clause outlines the procedures for winding up the
company in case of insolvency or any other reason.
● Miscellaneous Clause: This clause includes any other provisions or information
that is relevant to the formation and operation of the company.

It is important to note that the MoA must comply with the relevant laws and
regulations of the jurisdiction in which the company is being formed.

Advantages and Disadvantages of MoA

Lifecare IPO
Magenta
Advantages of Memorandum of Association (MoA):
1. Legal Status: The MoA provides the company with legal status and establishes it
as a separate legal entity from its owners or shareholders.
2. Objectives: The MoA specifies the objectives and activities that the company is
authorized to undertake. It ensures that the company operates within the scope of its
objectives and complies with the applicable laws and regulations.
3. Protection of shareholders: It outlines the rights and obligations of the
shareholders, which helps protect their interests. It also helps prevent any
unauthorized activities or decisions that could adversely affect the shareholders.
4. Capital Raising: The MoA specifies the company's authorized share capital, which
helps investors understand the potential size of the company and the amount of
capital required for its operations. This helps in raising capital through the issuance
of shares.
5. Decision Making: It helps in decision-making by outlining the company's powers
and limitations. It guides the management and directors on the activities the
company can undertake, which helps them make informed decisions.

Disadvantages of Memorandum of Association (MoA):

1. Restrictive: The MoA specifies the objectives and activities the company is
authorized to undertake, which can be restrictive. It may prevent the company from
taking advantage of new opportunities or entering into new markets.
2. Difficulty in Changing: The MoA is a legal document, and any changes to it
require the approval of the shareholders and the relevant authorities. This can be a
lengthy and complicated process.
3. Limited Liability: The liability of the members of the company may be limited, but
this may not always be an advantage. In some cases, it may make it more difficult for
the company to raise capital, as investors may be hesitant to invest in a company
with limited liability.
 4. Cost: The process of drafting and registering the MoA can be expensive,
What are you searching for? Help? Login Open Demat Account
especially if legal assistance is required.
5. Public Disclosure: The MoA is a public document, and its contents are available
Products Stocks Mutual Funds IPO Resources Pricing English
for public inspection. This may reveal sensitive information about the company's
objectives and operations to competitors and other stakeholders.

In summary, while the Memorandum of Association provides many benefits to a

company, there are also some disadvantages that must be considered before it is
drafted and registered. It is important to weigh the advantages and disadvantages
carefully to determine whether the MoA is appropriate for the company's needs.

Conclusion
In conclusion, the Memorandum of Association (MoA) is a legal document that plays
a vital role in the formation of a company. It outlines the objectives, activities, and
limitations of the company and helps establish it as a separate legal entity. The MoA
also protects the interests of the shareholders, helps in decision-making, and
provides guidance to the management and directors.
However, the MoA can also be restrictive, difficult to change, and expensive to draft
and register. It may also limit the liability of the members of the company and reveal
sensitive information about the company to competitors and other stakeholders.
Therefore, before drafting and registering the MoA, it is important to weigh the
advantages and disadvantages carefully to determine whether it is appropriate for
the company's needs. Legal assistance may be necessary to ensure that the MoA
complies with all the applicable laws and regulations.

Learn more

Lifecare IPO
Magenta
Stock / Share Market Demat Account Online Trading

Mutual Funds Commodity Trading Basics IPO

Trading Holiday Derivatives Trading Basics Generic

Aadhaar Card Pan Card Savings Schemes

International Markets Loans Banking

Currency Bond and Debenture Insurance

Open Free Demat Account

Be a part of 5paisa community - The first listed discount broker of India.
 What are you searching for? Help? Login Open Demat Account
+91 Enter Mobile Number Open Demat Account

Products Stocks Mutual Funds IPO Resources Pricing English

Frequently Asked Questions

How many clauses are there in the Memorandum of Association?

Is the Memorandum of Association the same as the Article of Association?

Is the Memorandum of Association a Public Document?

Who can be subscribers to the Memorandum of Association?

What is the liability of MoA?

Lifecare IPO
Magenta
What is the purpose of MoA?

Share Market Market Guide Email: support@5paisa.com

Mutual Funds Calculators

Support Desk Helpline: 8976689766

Top Stocks Indices

Follow us on
More

More Information Download now

CIN: L67190MH2007PLC289249 | Stock Broker SEBI Regn.: INZ000010231 | SEBI RA Regn.: INH000004680 | SEBI Depository Regn.: IN DP CDSL: IN-DP-
192-2016 | AMFI REGN No.: ARN-104096 | NSE Member id: 14300 | BSE Member id: 6363 | MCX Member ID: 55945 | Investment Adviser Regn No:
INA000014252 | Registered Address - IIFL House, Sun Infotech Park, Road no. 16V, Plot no. B-23, MIDC, Thane Industrial Area, Waghle Estate, Thane,
Maharashtra - 400604

*Brokerage will be levied flat fee/executed order basis and not on a percentage basis. Flat fee of Rs. 10/order is available with Power Investor & Ultra
Trader Packs. Investment in securities market are subject to market risk, read all related documents carefully before investing. Digital account would
be opened after all procedure relating to IPV and client due diligence is completed. If sale/ purchase value of share of Rs.10/- or less, a maximum
brokerage of 25 paisa per share may be collected. Brokerage will not exceed the SEBI prescribed limit.

Compliance Officer: Ms. Namita Godbole, Email: support@5paisa.com, Support Desk Helpline: 8976689766
Contact Us
What are you searching for? Help? Login Open Demat Account

Attention Investors English

Products Stocks Mutual Funds IPO Resources Pricing
email IDs with your stock brokers. Receive information of your transactions directly from Exchange on your mobile/email at the

©2024, 5Paisa Capital Ltd. All Rights Reserved. We are ISO 27001:2013 Certified.

Lifecare IPO
Magenta