Q.What is a ‘Memorandum of Association’? Briefly explain its clauses.

The Memorandum of Association (MOA) is the most important document of a company, because it defines the company's objectives; no company can legally undertake any activity not contained in it. Its clauses are:

• Name clause — states the company's approved name.
• Registered office clause — states the state in which the registered office is situated (exact address notified within 30 days of incorporation).
• Objects clause — defines the purpose for which the company is formed; the company cannot act beyond it. …

What is the Memorandum of Association?

• The MOA is the most important document of a company, because it defines the objectives of the company. No company can legally undertake any activity that is not contained in its Memorandum.
• It defines the company's relationship with the outside world, and every company must file it. In the signatory portion, the subscribers state their intention to be associated with the company and undertake to subscribe to the shares set against their names (at least seven persons for a public company and two for a private company).

Clauses of the Memorandum

• (a) Name clause: states the name of the company, which has already been approved by the Registrar of Companies.
• (b) Registered office clause: states the name of the state in which the registered office is proposed to be situated. The exact address is not required at this stage but must be notified to the Registrar within thirty days of incorporation.
• (c) Objects clause: probably the most important clause; it defines the purpose for which the company is formed. The company cannot lawfully undertake any activity beyond these objects. The main objects are listed here, and any act essential or incidental to attaining the main objects is treated as valid even if not stated explicitly.
• (d) Liability clause: limits the liability of members to the amount unpaid on the shares they hold. For example, if a shareholder holds 1,000 shares of ₹10 each and has already paid ₹6 per share, the liability is limited to ₹4 per share — at most ₹4,000. …