MOA

*

Memorandum & Article of Association

*


Memorandum of Association of a company is its charter & defines the limitations of the powers of a company. It contains the fundamental condition upon which alone the company is allowed to be incorporated. No company can be registered under the Companies Act, 1956 without the memorandum of association. Under Section 2(28) of the Companies Act, 1956 the Memorandum means the memorandum of association of the company as originally framed or as altered from time to time in pursuance with any of the previous companies law or the Companies Act, 1956.
*

First step in the formation of a company.Constitution of the company.Defines limitations of the powers of a company.
*

The memorandum must state the name of the company with public limited as the word in case of a public limited company and with private limited', in the case of a private limited company .The company is free to choose any name but it must not be undesirable or must not resemble the name of any other registered company.
*

The state in which the registered office of a company will be situated is mentioned in this clause . The registered office of the company is the official address of the company where the statutory books and records must normally be kept.
*

This clause is quite important and must be very carefully drafted as it determines the activities of the company. In the object clause each and every detail of activities of the business to be carried out must be laid down.

Main object:- This sub-clause contains the main objects of the company to the pursued on its incorporation

Objects incidental or ancillary :- It covers the objects which are incidental or ancillary to the attainment of the main object

Other objects :- This sub-clause will cover any objects which are not included in the main objects

*

This clause states the nature of liability of the members of the company . In the case of a company limited by share or by guarantee the fact that the liability of its members is limited must be made absolutely clear . In case of a company limited by shares the liability of a member is limited to the nominal value of the share held by him . If the share are fully paid up, his liability is nil. But in case of partly paid-up shares the liability is limited to the amount which is unpaid.

In case of a company limited by guarantee ,the liability clause must state the amount which every member undertakes to contribute to the assets of the company in the event of its winding up.

*

This clause states that amount of the capital with which the company is to be registered. This clause should also state the number and face value of shares into which the capital of the company is divided The capital with which the company is registered or nominal or authorized .
*

In this clause , the subscribes declare that they desire to be formed into a company and agree to take the shares stated against their names . The names ,address and occupation of the subscribers must be given.
*

*
Alteration OfName ClauseAlteration Of Registered office clauseAlteration Of Object clauseAlterationOfLiability clauseAlteration OfCapital clause

Special Resolution.Written Approval of Central Government.No Approval of Central Government is necessary if the change of name involves only the addition or deletion of the word Private.Change by ordinary resolution and approval of Central Government when name is identical or too closely resembles the name of an existing company.
ALTERATION OF NAME CLAUSE

*


A. Special Resolution

B. Alteration is sought on any of these grounds:
To carry on its business more economically & more efficientlyTo attain its main purpose by new or improved meansTo enlarge or change the local area of its operationsTo carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the companyTo restrict or abandon any of the objects specified in the memorandumTo sell or dispose off the whole or any part of the undertakingTo amalgamate with any other company
C. Copy of (A) is filed with ROC within 30 days

ALTERATION OF OBJECTS CLAUSE

*


The company has been formed with the object to make and sell, or lend or hire railway carriage and wagons and all kinds of railway plants, to carry on the business of mechanical engineers and general contractors etc.The company contracted with Riche to finance the construction of Railway line in Belgium. The company repudiated the agreement and was sued for breach of contract
ASHBURY RAILWAY CARRIAGE & IRON COMPANY LTD. Y. RICHE

*


The construction of a railway, was ultra vires. Therefore Riches action for breach of the alleged contract failed as it was void.The law has since changed through Section 108 of the Companies Act 1989, substituting a new section 35 of the Companies Act 1985. Under that new section it remains the duty of the directors to observe any limitations on their powers flowing from the companys memorandum (and a member of a company may bring proceedings to restrain the doing of an act in excess of those powers (section 35(2)); but, by section 35(1): "The validity of an act done by a company shall not be called into question on the ground of lack of capacity by reason of anything in the companys memorandum."
ASHBURY RAILWAY CARRIAGE & IRON COMPANY LTD. Y. RICHE

*


The words :
Ultra means beyondVires means the powersUltra Vires means beyond the powers
A company which owes its incorporation to statutory authority cannot effectively do anything beyond the powers expressly or impliedly conferred upon it by the statute or Memorandum of Association.

DOCTRINE OF ULTRA VIRES

*


From one premises to another premises in the same city, town or village
By passing a resolution of Board of Directors
ALTERATION OF REGISTERED OFFICE

*


From one town or city or village to another town or city or village in the same state
Special Resolution.Confirmation of Regional Director when jurisdiction of Registrar of companies is changed.Copy of (i) & (ii) to be filed with ROC.Notice of new location to ROC within 30 days.

*


From one state to another state
Special ResolutionConfirmation of Central Govt.For certain Purposes only
(As given in section 17)


*


The liability of a member of a company cannot be increased unless the member agrees in writing.From unlimited liability, it can be made limited by re-registration of the company.
ALTERATION OF LIABILITY CLAUSE

*


A company can reduce share capital by first passing a special resolution for reduction of capital but powers to reduce share capital must be guaranteed in the articles of the company ,otherwise the share capital can be altered by special resolution giving such powers The company can apply to the court by petition for getting confirmation from the court for reducing the share capital . The main duty of the court is to look after the interest of the creditors and different classes of shareholders , and then decide whether the company should be allowed to reduce share capital .
ALTERATION OF CAPITAL CLAUSE

*


Documents

MOA