CHARTER DOCUMENT OF COMPANY- MEMORANDUM OF ASSOCIATION

INTRODUCTION:

• Memorandum of Association is an official document of the company. Basically, it is a document which sets out the constitution of the company and lays the foundation stone on which the structure of the company is built. It is one of the essential pre-requisite for the incorporation of any company.

• The memorandum defines broadly 2 things:

                       (a) overall objectives for which the company has been incorporated;

                       (b) relationship of the company with the outsiders.

• The purpose of MOA is to declare to the public:
• Field or purpose of investment of shareholder’s money;
• Scope of the company’s activities.

LEGAL MEANING:

In legal parlance, as per sec.2(56) of companies act, 2013 it means memorandum as originally framed at the time of incorporating a company and which is altered from time to time accordingly i.e. altered during the going concern of the company.

PROVISIONS:

Schedule I of Companies Act,2013 specifies 5 tables which define the format of MOA for different types of companies: Table A for a company limited by shares, Table B for a company limited by guarantee not having a share capital, Table C for a company limited by guarantee and having a share capital, Table D for an unlimited company not having a share capital, Table E for an unlimited company having a share capital.

MOA should be: printed, divided into paragraphs, numbered consecutively, stamped, signed by subscribers to the memorandum and witnessed.

CLAUSES IN MOA

Section 4 of the act defines the contents of MOA. There are 6 contents or clauses of MOA:

• Name clause which defines the name of the company with which it will be known. Name of the company helps to establish its separate identity. The company can adopt any name it likes provided it is not undesirable. Certain do’s for this clause is that name of OPC to end with OPC Pvt. Ltd., name of private limited company to end with word Pvt. Ltd., name of public limited company to end with Public Ltd. Some dont’s for this clause is not to choose a name which is considered undesirable by the central government like not selecting a name which is similar or identical to an already registered company.
• Situation clause which defines the state of the registered office of the company. The name of state wherein registered office of the company is situated to be given at the time of incorporation of a company in the memorandum however, exact address need not be given at that time, it can be provided at any time within 30 days of incorporation.
• Object clause which defines the objective or power of the company. It defines the purpose and capacity of the company. It states affirmatively the ambit and extent of powers of the company and negatively that nothing shall be done beyond that ambit. However, the company may do anything which is incidental and consequential to the main object of the company.
• Liability clause which defines the liability of shareholders. If a company is limited by shares then liability is limited to the shares unpaid. If a company is limited by guarantee then liability is limited to the amount which he undertook to contribute in case of liquidation of the company.
• The capital clause which defines 3 things: face value, number of shares and authorized share capital of the company.
• Subscription clause which defines particulars of subscribers to MOA. It is also known as the association clause. Hereby, shareholders give the declaration as to association. It lays down that memorandum must be signed by each subscriber in presence of one witness who will also attest his signature and each subscriber to take at least one share and also writing opposite his name the numbers of shares he agreed to take. 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise.