DEFINITION OF MEMORANDUM OF ASSOCIATION
“The Memorandum of Association of an organization is the sanction and characterizes the impediment of the intensity of the organization set up under the Act”.
“LORD CAIRNS”
Memorandum of Association is the most significant archive of an organization. It expresses the items for which the organization is framed. It contains the rights, benefits, and powers of the organization. Thus, it is known as a contract of the organization. It is treated as the constitution of the organization. It decides the connection between the organization and the outsiders. The entire business of the organization is developed by the Memorandum of Association. An organization can’t embrace any business or action not expressed in the Memorandum. It can practice just those forces which are plainly expressed in the Memorandum.
In this manner, a Memorandum of Association is a record that sets out the constitution of the organization. It unmistakably shows the organization’s relationship with the outside world. It additionally characterizes the extent of its exercises. MoA empowers the investors, leasers, and individuals who have to manage the organization in some structure to know the scope of exercises.
FORMAT OF MEMORANDUM OF ASSOCIATION
As indicated by Section 4 of the Companies Act, 2013, organizations must attract the MOA the structure given in Tables A-E in Schedule I of the Act. Here are the subtleties of the structures:
- Table A: Form for the reminder of the relationship of an organization restricted by shares.
- Table B: Form for the reminder of the relationship of an organization restricted by ensure and not having an offer capital.
- Table C: Form for the reminder of the relationship of an organization restricted by ensure and having an offer capital.
- Table D: Form for the notice of the relationship of a boundless organization.
- Table E: Form for the notice of the relationship of a boundless organization and having a share capital.
CONTENTS OF MEMORANDUM
Section 13 of the companies act states that the memorandum of the association of a company must contain the following:-
NAME CLAUSE
It must contain the name of the organization with the word ‘Limited’ if there should arise an occurrence of a Public Limited Company and with the word ‘Private Limited’ if there should be an occurrence of a Private Limited Company.
SITUATION CLAUSE
The name of the State where the Registered Office of the organization is arranged. To decide the purview of the court and the Registrar of this organization, it is significant.
OBJECT CLAUSE
The Memorandum must contain the objects of the organization and which must be named:
(I) The primary objects of the organization to be sought after by the organization;
(ii) Objects coincidental or auxiliary to the accomplishment of the principal objects; and
(iii) Other articles that are excluded from (I) and (ii) above.
AREA OF OPERATION CLAUSE
The state or states to whose regions the objects of the organization reach out (aside from if there should arise an occurrence of exchanging partnership) must be contained.
LIABILITY CLAUSE
A restricted organization must state in its Memorandum that the obligation of its individuals is constrained and an assurance organization must express the risk of its individuals if the organization goes into liquidation.
CAPITAL CLAUSE
On account of an organization having an offer capital, it must specify the measure of offer capital by which the organization proposes to be Registered and division thereof into a portion of a fixed sum.
THE ASSOCIATION AND SUBSCRIPTION CLAUSE
The Memorandum must contain this condition which educates the assent regarding the individuals identifying with the arrangement and the number of offers taken by every one of them. Every part is to take at any rate one portion of the organization and to express his name, address, portrayal, number of offers taken by him alongside the name, address, and depiction of the observer.
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