MEMORANDUM AND ARTICLES OF ASSOCIATION

CONTENTS

Memorandum of Association [MOA]• Purposes of MOA• Format of MOA• Memorandum Clauses• Alteration of Memorandum

Articles of Association• Definition• Contents of Articles• Alteration of Articles• Difference between MOA & AOA

The Companies Act’1956, states that ‘company’ includes company formed and registered under the Act or an existing company.

Registration

AOAMOA

MEMORANDUM OF ASSOCIATION

Memorandum of AssociationThe first step is the formation of a

company is to prepare a Memorandum of Association. This is also known as constitution of the company.

Definition of MOA [Sec. 2(28)] “Memorandum means Memorandum of

Association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of the Companies Act of 1956”.

Purposes of Memorandum

There are two purposes of MOA:1. Shareholder purpose ∆ Field of investment ∆ Risk of investment

2. Outsider’s purpose ∆ Objects of the company ∆ Contractual relation

Format of Memorandum• Divided into paragraphs and numbered consecutively

• Signed by subscriber→ For private company 2 subscriber → For public company 7 subscriber (In the presence of at least 1 witness)

• Should be printed

• Should be accepted by the Registrar

Memorandum Clauses

MOA

Name Clause

Registered Office Clause

Liability Clause

Capital Clause

Object Clause

Association Clause

Name Clause [Sec13(1)(a)]

Undesirable name to be avoidedIn junction if identical name adoptedLimited or Private as the last words of the

name.Prohibition of using certain names and

symbols

Registered Office Clause [Sec13(1)(b)]

Every company should have its fixed office.

Notice of the situation of the office within 30 days of incorporation

Object Clause [Sec13(1)(c)(d)]

• Object both defines and confines the powers of the company.

• Its useful for both Shareholders and Creditors

The Capital Clause [Sec13(4)(a)]

Fixed share capital with which the Company is to be installed.

Fixed capital with which it is registered is called “Registered Capital”.

The Liability Clause [Sec.13(2)]

Company limited by Shares or by guarantee shall also state the liability of its members.

If the number of members falls below the statutory minimum then the members who are a part of the company are responsible for the debts.

The Association Clause [Sec.13 (4)(C)]

We the persons whose names and addresses are incorporated in the Memorandum, agree to take the number of shares in Capital.

Alteration of Memorandum Of Association

Change of NameChange of Registered OfficeAlteration of ObjectsChange in Liability ClauseChange in Capital

ARTICLES OF ASSOCIATION

ARTICLES OF ASSOCIATION [Sec.2(2)]The rules , regulations & bye-laws for the

internal management of the affairs of the company

Definition : “The Articles Of Association of company as originally framed or as altered from time to time in pursuance of this Act, including so far as they apply to the Company, the regulations contained in Table A of shedule I annexed to this Act”

Properties Of Articles Of Association

Next important to Memorandum of Association

Must not violate the Memorandum and the Act

Contents of AOA

Share capital and variation of rights

Lien of company on shares

Calls on sharesShare certificateTransfer of sharesTransmissionForfeiture of sharesConversion of shares

with stocksShare warrants

Alteration of share capital

General MeetingProceeding at

general meetingsNotes by membersBoard of Directors

and their powersCapitalizationWinding up

Application of AOA

Unlimited CompaniesCompanies limited by guarantee ∆ Having share capital ∆ Does not have share capital• Private Company ∆ Restricting number of members ∆ Right to transfer of shares ∆ Prohibition of any public involvement

Alteration Of Articles

Must not be inconsistent with the Act.Must not conflict with Memorandum.Must not sanction anything illegal.Must be benefit for the company.Must not increase Liability of Members.Alteration by Special resolution.Approval of Government when Public

Company is converted into Private company.

MOA Vs AOA

MOA AOA It is the Charter of the

company indicating the nature of its business

It defines the scope of the activities of the company

It being the Charter of the company is the “Supreme” document

Every company must have its own Memorandum

There are strict restrictions on its alteration

They are the regulations for the internal management of the company

They are the rules for carrying out the Objects of the company

They are subordinate to the Memorandum

A company limited by shares need not have Articles of its own. Table A

It can be altered by Special Resolution

Thank You!