What is Memorandum of Association (MoA)?

What is Memorandum of Association (MoA)?

The Memorandum of Association is said to be the supreme document of the company. In the MoA, the character of the company is mentioned. The MoA sets out the powers of the company, the objectives of the company, and the operations in which the company will be engaged. It is worth noting that the company can only undertake those activities that are listed in the MoA. The MoA describes the boundaries beyond which company action cannot proceed. The MoA is also a vital document for shareholders and creditors to interact with and deal with the company, as most of the time the stakeholder goes through the MoA to understand the exact business of the company and its limits before entering any business transaction with the company. The boundary beyond, as specified under the MoA, gives an overview of the powers and objectives beyond which the company cannot take action. MoA is signed by seven members in the case of a public limited company, whereas in the case of a private limited company, an MoA is signed by at least two subscribers of the company....

Format of MoA

Under Section 4(6) of the Companies Act 2013, a Memorandum of Association (MoA) may take any of the forms mentioned under Tables A to E of Schedule 1. As there can be various types of businesses, the tables are of various types:...

Objectives for Registering MoA

1. To Provide a Legal Status: The MoA is a legally binding document that establishes the scope of the company’s activities and helps the company provide a legal identity. The MoA also helps establish the company as a separate legal entity distinct from its owners or members....

What are the Main Clauses of the MoA?

As per the Companies Act of 2013, the following mandatory clauses are to be included in the MoA:...

Contents of Memorandum of Association (MoA)

1. Name Clause: This clause contains the name of the company; a name is the general identity of a company. In the case of a public limited company, the word “limited” should be at the end of the name, whereas in the case of a private limited company, the last words should have “private limited” at the end. It is worth noting that this clause does not apply to the companies that are formed under Section 8 of the Act. Further, the company should not have any identical name as any existing company registered under this law or any other previous company’s act. The name of the company should not be undesirable in the opinion of the central government. Examples of undesirable names include board, commission, authority, republic, etc....

Alteration of Memorandum of Association

The MoA must be altered or amended from time to time to include the changes in clauses, if any. The following changes will be considered an alteration of the MoA:...

Conclusion

The Memorandum of Association is also known as the charter of the company. The MoA states all the rights, privileges, and powers of the company. The MoA sets out the powers of the company, the objectives of the company, and the operations in which the company will be engaged. The MoA is a legally binding document that establishes the scope of the company’s activities and helps the company provide a legal identity. The MoA is also a vital document for shareholders and creditors to interact with and deal with the company, as most of the time the stakeholder goes through the MoA to understand the exact business of the company and its limits before entering any business transaction with the company. The boundary beyond, as specified under the MoA, gives an overview of the powers and objectives beyond which the company cannot take action. The MoA contains six major clauses, namely the name clause, registered office clause, object clause, liability clause, capital clause, and nominee clause. The MoA will be altered once the RoC approves the special resolution filed to amend the MoA....

Frequently Asked Questions (FAQs)

1. What is a Memorandum of Association?...