Memorandum of Association is a document which set out the constitution of a company. It is the foundation of a company which defines the scope of the company's activities and its relations with the outside world.
According to section 2(56) of the Companies Act, 2013 'memorandum' means the memorandum of association of a company as originally framed and altered from time to time in pursuance of any previous law or Act.
Characteristics of Memorandum of Association
- MoA is the charter of the company.
- MoA contains the objects for which the company formed.
- MoA determines the scope of a company beyond which its action can not go.
- MoA clearly defines limitation of relation with outside world.
Contents of Memorandum
Section 4(1), the memorandum of a limited company must state the following:
- Name Clause:- This clause contents the details of the name of the company with "limited" as its word in the case of a public company and "private limited " as its last words in case of private company.
- Situation Clause:- This clause contains the name of the state in which the registered office is situated.
- Object clause:- This clause contain the details of the objects for which the company is proposed to be incorporate and other intensive objects in future.
- Liability clause:- This clause contains the details of the liability status of the company whether limited or unlimited or limited by shares or guarantee.
- Capital clause:- This clause contains the details of the total amount of share capital, the division of total amount of capital, each subscriber to the memorandum intends to take how much shares etc.
- In case of One Person Company, the name of the person who, in the event of the death of the subscriber, shall become the member of the existing company.
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