Saturday, 4 October 2014

Companies Acts 1956: Memorandum of Association

Documents of a Company

When companies are created then many documents are required to be issued by the company.
Memorandum of Association

Memorandum of Association (MOA):


The memorandum means the memorandum of association of a company which is framed at the time of incorporation or which is altered from time to time. Every company must have MOA.


  • Every MOA is supreme document of a company and it defines a company, at the same time it confines the company.
  • Every memorandum has Name, place of registered office and main objectives of the company.
  • Company cannot do any thing which is against the provisions the provisions of memorandum.


Every MOA has six main contents
  •                 Name Clause
  •                 Registered office Clause
  •                 Object Clause
  •                 Capital Clause
  •                 Liability Clause
  •                 Association Clause

        Name Clause: 

Every company must have a name. If is a private company then along with the name the word pvt ltd is written, however if it is a public company then along with the name the word limited is written. Name of a company is a selected by promoters with the help of ROC so the promoters will select the name and give it to ROC. If the name is available the ROC will allow the name to company.
        Undesirable Name: It means that the name is undesirable and the name will not be given to company. The name will be undesirable if the name has any one of the following words or symbols.
  •    “Some Illegal word or some word which shows illegal business
  •      Some national Symbol
  •       Name of Govt offices”

                                If the name of a company has these words or symbols then the name will not be given to the company.
                                Similar Name: If the name of company similar to the name of an existing company then such name is not given to the company.


                If a new company is registered with a name which is similar to the name of an existing company then the existing company will take an injunction against the subsequent company and the subsequent company will be stopped from working.
                Depending upon the name the paid up capital is fixed.
Example: If the company has a word global or international then its capital must be at least 5crore Rs.

Registered office Clause:

                Every Co. must have registered office. It is the office where the books of accounts of a company are kept. It is not compulsory that at the time of incorporation the registered office is decided. The MOA has name of the state in which the registered office is situated. It does not require the complete address.
After incorporation of company it is necessary to decide the registered office and inform the ROC regarding the address of registered office.

 Object Clause:

                This clause has the objectives for which the company is registered.
                Objects of a company are classified into two categories:
                Main Objects and other objects.
                Main objects are those objects for which the company is registered.
                Other objects are ancillary objectives/incidental which can be done by the company along with the main objectives.

Capital Clause:

This clause contains details regarding share capital hence this clause is the capital clause of a company which will deal with the equity and preference shares. This clause shows the breakup of share capital in different parts.

Liability clause:

This clause mentions the nature of liability and it mentions whether the liability is limited or unlimited. Liability is decided by promoters.

Association Clause:

This clause has a statement that all the persons forming the company are joining to form a company and the company will be a legal person created by companies act hence the members a are now forming a company which will carry on all its businesses in its name.


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