Post on 14-Dec-2014
MEMORANDUM AND ARTICLES OF ASSOCIATION
CONTENTS
Memorandum of Association [MOA]• Purposes of MOA• Format of MOA• Memorandum Clauses• Alteration of Memorandum
Articles of Association• Definition• Contents of Articles• Alteration of Articles• Difference between MOA & AOA
The Companies Act’1956, states that ‘company’ includes company formed and registered under the Act or an existing company.
Registration
AOAMOA
MEMORANDUM OF ASSOCIATION
Memorandum of AssociationThe first step is the formation of a
company is to prepare a Memorandum of Association. This is also known as constitution of the company.
Definition of MOA [Sec. 2(28)] “Memorandum means Memorandum of
Association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of the Companies Act of 1956”.
Purposes of Memorandum
There are two purposes of MOA:1. Shareholder purpose ∆ Field of investment ∆ Risk of investment
2. Outsider’s purpose ∆ Objects of the company ∆ Contractual relation
Format of Memorandum• Divided into paragraphs and numbered consecutively
• Signed by subscriber→ For private company 2 subscriber → For public company 7 subscriber (In the presence of at least 1 witness)
• Should be printed
• Should be accepted by the Registrar
Memorandum Clauses
MOA
Name Clause
Registered Office Clause
Liability Clause
Capital Clause
Object Clause
Association Clause
Name Clause [Sec13(1)(a)]
Undesirable name to be avoidedIn junction if identical name adoptedLimited or Private as the last words of the
name.Prohibition of using certain names and
symbols
Registered Office Clause [Sec13(1)(b)]
Every company should have its fixed office.
Notice of the situation of the office within 30 days of incorporation
Object Clause [Sec13(1)(c)(d)]
• Object both defines and confines the powers of the company.
• Its useful for both Shareholders and Creditors
The Capital Clause [Sec13(4)(a)]
Fixed share capital with which the Company is to be installed.
Fixed capital with which it is registered is called “Registered Capital”.
The Liability Clause [Sec.13(2)]
Company limited by Shares or by guarantee shall also state the liability of its members.
If the number of members falls below the statutory minimum then the members who are a part of the company are responsible for the debts.
The Association Clause [Sec.13 (4)(C)]
We the persons whose names and addresses are incorporated in the Memorandum, agree to take the number of shares in Capital.
Alteration of Memorandum Of Association
Change of NameChange of Registered OfficeAlteration of ObjectsChange in Liability ClauseChange in Capital
ARTICLES OF ASSOCIATION
ARTICLES OF ASSOCIATION [Sec.2(2)]The rules , regulations & bye-laws for the
internal management of the affairs of the company
Definition : “The Articles Of Association of company as originally framed or as altered from time to time in pursuance of this Act, including so far as they apply to the Company, the regulations contained in Table A of shedule I annexed to this Act”
Properties Of Articles Of Association
Next important to Memorandum of Association
Must not violate the Memorandum and the Act
Contents of AOA
Share capital and variation of rights
Lien of company on shares
Calls on sharesShare certificateTransfer of sharesTransmissionForfeiture of sharesConversion of shares
with stocksShare warrants
Alteration of share capital
General MeetingProceeding at
general meetingsNotes by membersBoard of Directors
and their powersCapitalizationWinding up
Application of AOA
Unlimited CompaniesCompanies limited by guarantee ∆ Having share capital ∆ Does not have share capital• Private Company ∆ Restricting number of members ∆ Right to transfer of shares ∆ Prohibition of any public involvement
Alteration Of Articles
Must not be inconsistent with the Act.Must not conflict with Memorandum.Must not sanction anything illegal.Must be benefit for the company.Must not increase Liability of Members.Alteration by Special resolution.Approval of Government when Public
Company is converted into Private company.
MOA Vs AOA
MOA AOA It is the Charter of the
company indicating the nature of its business
It defines the scope of the activities of the company
It being the Charter of the company is the “Supreme” document
Every company must have its own Memorandum
There are strict restrictions on its alteration
They are the regulations for the internal management of the company
They are the rules for carrying out the Objects of the company
They are subordinate to the Memorandum
A company limited by shares need not have Articles of its own. Table A
It can be altered by Special Resolution
Thank You!