MEMORANDUM OF ASSOCIATION MEANING OF MOA THE MOA

MEMORANDUM OF ASSOCIATION

MEANING OF MOA THE MOA OF A COMPANY ALSO CALLED ITS CHARTER IS A COMPANY PRINCIPAL DOCUMENT. IT REFERS TO THAT DOCUMENT WHICH DEFINES THE PRINCIPAL CONDITIONS ON WHICH THE COMPANY IS INCORPORATED. NO COMPANY CAN BE REGISTERED WITHOUT ITS MOA.

DEFINITION OF MOA ACC. TO LORD MACMILLIAN: THE PURPOSE OF MOA IS TO ENABLE THE SHAREHOLDERS, CREDITORS AND THOSE WHO DEAL WITH THE COMPANY, TO KNOW ITS PERMITTED RANGE OF ENTERPRISE.

CHARACTERISTICS OF MOA COMPULSORY DOCUMENT. CONSTITUTION OF COMPANY. NOT ALTERED. DEFINE SCOPE OF ACTIVITIES. PUBLIC DOCUMENT. TELLS THE RELATION OF COMPANY.

PURPOSE & IMPORTANCE OF MOA IT IS A FUNDAMENTAL DOCUMENT. UNALTERABLE DOCUMENT. DEFINES THE LIMITATIONS OF COMPANY’S OPERATION. IT FORMS THE BASIS OF RELATIONSHIP BETWEEN COMPANY AND OUTSIDERS. IT CONTAINS VARIOUS CLAUSES.

SUBJECT MATTER OF MOA SEC 13, OF CO’S ACT 1956, PRESCRIBES THE CONTENTS OF MOA MUST CONTAIN: ASSOCI-ATION CLAUSE NAME CLAUSES CAPITAL CLAUSE LIABILITY CLAUSE SITUATION CLAUSE OBJECT CLAUSE

ALTERATION OR CHANGE MOA A) ALTERATION IN NAME CLAUSE: IT CAN BE DONE IN TWO WAYS: A) BY SPECIAL RESOLUTION B) BY RECTIFICATION OF OMISSION IN NAME.

A)BY SPECIAL RESOLUTION: ACC TO SEC. 21: THE APPLICATION TO CENTRAL GOVT. FOR ALTERING THE COMPANY’S NAME MUST HAVE FOLLOWING DETAILS: a) Written statement for alteration. b) Copy of company’s name. c) P&L statement. d) A certified copy of registrar’s letter that he has received a copy of special resolution. e) If there is changed in objects of a company, then a copy of altered objectives as proposed by BOD. IF ABOVE CONDITIONS WILL MET THEN CENRAL GOVT. WILL GIVE ITS PERMISSION.

B) BY RECTIFICATION OF OMISSION IN NAME: IF THE NAME OF COMPANY IS MATCHED WITH SOME OTHER THEN BY PASSING A ORDINARY RESOLUTION COMPANY CAN CHANGE ITS NAME BY GETTING A WRITTEN PRIOR PERMISSION OF CENTRAL GOVT. BEFORE PASSING A RESOLUTION, GIVES ATTENTION: 1) Are the reasons put forward by company valid? 2) Is the new name of company corresponding to its main purpose? 3) Is not the compny name restricted?

B) ALTERATION IN SITUATION CLAUSE: A COMPANY MAY CHANGE THE SITUATION OF ITS REGISTERED OFFICE FOR SMOOTH RUNNING OF ITS BUSINESS AND REALISATION IF OBJECTS. SUCH CHANGE IN SITUATION CAN BE: a) From one place to another in same city or town. b) From one town to another in same state. c) From one state to another.

C) ALTERATION IN OBJECT CLAUSE: UNDER SEC-17(1) THE OBJECT CLAUSE CAN BE ALTERED ONLY IF ALTERATION IS REQUIRED TO ENABLE THE COMPANY: ü TO CARRY ON ITS BUSINESS MORE ECONOMICALLY. ü TO ATTAIN ITS MAIN PURPOSE BY NEW OR IMPROVED MEANS. ü TO ENLARGE OR CHANGE THE LOCAL AREA OF OPERATION. ü TO AMALGAMATE THE COMPANY WITH ANY OTHER COMPANY. ü TO SELL THE WHOLE OR ANY PART OF UNDERTAKING OF COMPANY.

D) ALTERATION IN LIABILITY CLAUSE: AS A GENERAL RULE, THE LIABILITY OF THE SHAREHOLDERS OF LIMITED COMPANY CANNOT BE MADE UNLIMITED UNLESS IT IS EXPRESSLY AGREED TO BY ALL MEMBERS OF THE COMPANY. BUT, IN SPECIAL CIRCUMSTANCES, A LIMITED COMPANY MAY, IF SO AUTHORISED BY ITS ARTICLES, BY SPECIAL RESOLUTION ALTER ITS MOA SO AS TO RENDER THE LIABILITY OF ITS DIRECTORS, OR OF ANY DIRECTOR OR MANAGER, UNLIMITED.

ALTERATION IN CAPITAL CLAUSE: A COMPANY MAKE ALTERATION IN THE CAPITAL CLAUSE OF ITS MOA, BUT IT CAN ONLY DO SO IF THERE IS SUCH PROVISION IN ITS ARTICLES TO ALTER THE CONDITION OF ITS MOA. THREE SITUATION OF ALTERING THE CAPITAL CLAUSE ARE AS UNDER: a) Increase in share capital. b) Reduction in share capital. c) Reorganisation of share capital.

CONCLUSION