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Commercial Correspondence and Secretarial Practice · Class 11 Commerce

Ch 4Memorandum of Association — Class 11 Commercial Correspondence and Secretarial Practice, concept-first.

Before a company can be registered under the Companies Act, 2013, the persons wishing to form it must first put down, in a single formal document, exactly what kind of company they intend to create, what it will be permitted to do, and on what fundamental terms it will exist.

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Memorandum of Association

The **Memorandum of Association (MOA)** is a company's most important document. It defines the company's objectives and governs its relationship with the **outside world** — no company can legally undertake any activity…

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Chapter contents

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Meaning and Definition of the Memorandum of Association

Before a company can be registered under the Companies Act, 2013, the persons wishing to form it must first put down, in a single formal document, exactly what kind of company they intend to create, w…

Importance of the Memorandum as the Company's Charter

The memorandum matters for two connected reasons, and a good exam answer on "importance of the memorandum" should touch both.

The Doctrine of Ultra Vires

"Ultra vires" is a Latin phrase meaning "beyond the powers." In company law, an act is said to be ultra vires the company when it falls outside the objects stated in the company's Memorandum of Associ…

Contents of the Memorandum — the Six Clauses at a Glance

Section 4(1) of the Companies Act, 2013 prescribes what every company's Memorandum of Association must contain, and company law traditionally organises these requirements into six clauses.

The Name Clause

The Name Clause is the opening clause of every Memorandum of Association, and it states the name by which the company is to be known.

The Registered Office (Situation) Clause

The Registered Office Clause, required by Section 4(1)(b), states the name of the State in which the company's registered office is to be situated — it fixes the company's domicile, not a full postal…

The Objects Clause

The Objects Clause is, in a very real sense, the heart of the Memorandum of Association. Required by Section 4(1)(c), it states the objects for which the company is proposed to be incorporated, along…

The Liability Clause

The Liability Clause, required by Section 4(1)(d), states the nature and extent of the liability that members undertake by joining the company.

The Capital Clause

For every company having a share capital, the Capital Clause, required by Section 4(1)(e), states the amount of share capital with which the company is to be registered — commonly called the authorise…

The Subscription (Association) Clause

The final clause of the Memorandum of Association is the Subscription Clause, also called the Association Clause, required by Section 4(1)(f) and read together with Section 4(6).

Alteration of the Memorandum of Association

A company's objects, name, capital structure, or the state where it is registered are rarely fixed forever from the moment of incorporation; businesses grow, diversify, relocate, and restructure their…

Exercises

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