Memorandum of Association

What is the use of a MoA?

The following are the uses of MoA:

1. Defines scope and power of company
2. Regulates the relationship between the company and the market

1. Registration of the company is not possible without submitting MoA
2. To gain knowledge about the company, anyone can enter into contractual relationship with a company using MoA
3. As it contains all the company’s details including member details and their liabilities, it is also known as Company’s Charter

Format of Memorandum of Association

The following are the types of tables of Schedule 1 under Section 4(5) of the Companies Act that defines the format of MoA:

Note:

1. MoA should be signed by the subscriber of the company
2. MoA should be divided into paragraphs, numbered, and printed.

Objectives of Registering for MoA

The following are the objectives of registering of MoA:

1. MoA is a vital document that content crucial information of the company.
2. It should be subscribed to form a company under Section 3 of the act.

1. In the case of a private company, two or more members should subscribe.
2. In the case of a public company, seven or more members should subscribe.
3. In the case of a One Person Company (OPC), only one member should subscribe.

1. A company’s Memorandum of Association and Articles of Association (AoA) must be signed by the subscriber to be registered with the ROC for the company as per Section 7(1)(a) of the Act.
2. MoA helps the shareholders to understand the company before purhcasing the shares and determining how much to invest in.
3. Provides the stakeholders willing to associate with the company with company information.

Note:

1. While applying for company registration, the MoA copy should be given to the ROC.

1. Upon payment of the prescribed fees, the ROC can provide a certified copy of the MoA to the public.

Main Clauses of the Memorandum of Association

The following are the main clauses of MoA:

Name Clauses

1. Determines the company’s name

1. Name should not be the same as that of another business.
2. The term ‘Private Limited’ should be included at the top as it is a private entity.
3. The term ‘Limited’ should be added to the end of its name in case of a public corporation.

Registered Office Clause

1. The name of the state in which the company’s registered office is located.

1. Helps in determining the Registrar of Companies’ authority.
2. The company must notify the Registrar of Companies of the site of its registered office within 30 days commencement of company.

Object Clause

1. Purpose of business.
2. State the main business of company.

1. Incidental objectives are not directly linked with the company’s core goals.

Liability Clause

1. Under this clause the responsibility of the company’s members is specified.
2. The members’ liability is limited by the balance outstanding on their share, the members’ liability is unlimited in an unrestricted company.
3. The members’ responsibility in a corporation is limited by the amount each partner has agreed to pay in case they are limited by guarantee.

Capital Clause

1. Also known as the authorised or nominal capital is the overall amount of capital that a corporation can obtain that is specified under this provision.
2. Under this clause, it will be illustrated how a large of sum money is divided into number of shares.

Who Can Subscribe to the MoA?

The following are the members who can subscribe to the MoA:

1. Any individual
2. Non-Resident Indians (NRIs) and foreign citizens
3. Any company can subscribe through a company representative
4. Limited Liability Partnership through an authorised partner
5. Minor can subscribe through a natural guardian

1. Under an Act of Parliament or State Legislature, any corporate body