Memorandum of Association
The Memorandum of Association or MOA is one of the most important documents of the company. It is the foundation on which the structure of the company is based. Therefore, it is considered one of the most important documents of the organization. It is the company’s charter that contains the fundamental conditions upon which the company can be incorporated. In addition, it describes the company’s relation with the world outside.
Under section 2  of the Companies Act 2013, it is defined as “Memorandum means the memorandum of association of the company originally framed, or as altered from time to time in pursuance of any previous company law or this act.”
Forms of MOA Under section 4
The memorandum of association shall be in such one of the forms of the company in Table A, B, C, D and E in the schedule 1 of the companies act, 2013, whichever may be applicable in the company.
Table A:- It is a form for a memorandum of association of a company limited by shares.
Table B:-It is a form for a memorandum of association of a company limited by guarantee but not having a share capital.
Table C:-It is a form for a memorandum of association of a company limited by guarantee but having a share capital.
Table D:-It is a form for a memorandum of association of an unlimited company but not having a share capital.
Table E:-It is a form for a memorandum of association of a company, an unlimited company with a share capital.
Contents of Memorandum of Association
- Name clause:- This clause specifies the company’s name. The company’s name should not be the same as that of another company. Also, if it is a private company, the word ‘Private Limited’ should appear at the end. In this case, if it is a public company, the term “Limited” should be added at the end of its name.
- Situation or registered office Clause:- This clause specifies the state’s name in which the company’s registered office is located—this aids in determining the Registrar of Companies’ jurisdiction. Within Thirty days of the company’s incorporation or commencement, the company must notify the Registrar of Companies of the location of its registered office.
- Object Clause:- This clause states the purpose for which the company was formed. The objectives are further subdivided into three categories:
The main objective: The main goal is to state the company’s main business.
Incidental objective: These are the secondary objectives to the achievement of the company’s primary goals.
Other objectives: Any other goals that the company may pursue that are not covered in the preceding purposes.
- Liability clause:- It specifies the liability of the company’s members. In an unlimited company, the members’ liability is total, whereas, in the case of a company limited by shares, the members’ liability is determined by the amount unpaid on their claim. The liability of the members in a company limited by guarantee is limited by the amount each member has agreed to contribute.
- Capital clause:- This clause specifies the maximum amount of capital that a company can raise, also known as the authorized/nominal capital of the company. This also explains how such capital amount is divided into the number of shares of a fixed amount each.
- Association or Subscription clause:- This clause provides that those who have agreed to subscribe to the memorandum must signify their associate and form the company.
- Nomination clause:- This clause is only applicable if the company is a one-person company. OPC to describe the nominee in the event of death of the subscriber.
Importance of Memorandum of Association
- It is an essential document for the establishment of the company.
- It contains fundamental conditions upon which alone the co. is allowed to be incorporated.
- It defines a company’s relationship with the world outside.
- It enables the share holder’s, creditors and other members who relate to the company to know its acceptable range of operation.
- It explains the capital structure of the company.
- It explains the liabilities and risks of subscribers.
FAQ’s on MOA
Table of Contents