What Is Memorandum of Association
What Is Memorandum of Association
What Is Memorandum of Association
Introduction:
In this Seminar topic we are going to study alteration of memorandum of association of the
company. For this purpose I will explain in short about Memorandum of association.
The Memorandum of Association is a document which sets out the constitution of the Company
and is therefore the foundation on which the structure of the company is based. It defines the
scope of the company’s activities and its relations with the outside world.
About MoA:
The first step in the formation of company is to prepare a document called the MoA. It is a
written document in fact memorandum is one of the most essential pre requisites for
incorporating a registered company under the act, this is evidence in section 12 of the act, which
provides a mode of forming an incorporated company and states in the case of a public company,
any 7 of more person and in the case of a private company, any two or more persons, associated
for any lawful purpose, may be subscribing their names to a Memorandum and complying with
the other requirements of this act in respect of registration, may from an incorporated company,
with or without limited liability.
This definition does not state the nature of this document nor is indicative of its importance.
Section 13 of the act specifies in clear terms the contents of this important document which is a
charter of the company.
To study
3. Alteration of Memorandum of Association
For the purpose of amendment different clauses of MoA are broadly classified into two parts,
namely,
A) Part relating to conditions, and
B) Part relating to other provisions.
The conditions part of the memorandum cannot be amended except by way of procedure
expressly lead down in the company’s act 1956 [See Section 16(1)].
The provisions relating to the name clause, registered office clause, the objects clause, limited
liability clause, Subscriber’s share clauseas provided in Section 13 of the Company’s Act, 1956
or any other specific provisions contained in the Act are to be registered as the conditions
contained in the memorandum [Section 16(2)].
For the alteration of those conditions in the Memorandum of Association, presubscribed
procedure is to be followed and strict compliance of the producer is demanded by law. Failure to
comply with the expressed provisions made under the Act for the purpose of alteration of the
conditions contained in the memorandum will be deemed as a nullity.
Other provisions which are found included in the memorandum including those relating to
appointment of a managing director or manager fall in the category of other provisions in the
memorandum [See Section 16(3)].
These may be generally altered in the same manner as the articles of the company unless there
are any specific directions as to the procedure to be followed made in the act.
Thus, procedure to be followed as provided in the articles is adhered to for this purpose. The
procedure for the alteration of the compulsory clauses or conditions of the memorandum is
discussed in detailed in the following chapter.