Monday, December 10, 2018

MEANING,CONTENTS OF THE MEMORANDUM ASSOCIATION

MEMORANDUM OF ASSOCIATION


MEANING
IS AN EXTREMELY IMPORTANT DOCUMENTS. DOCUMENT WHICH IS THE CONSTITUTION OF THE COMPANY. IT CONTAINS THE OBJECTS FOR WHICH THE COMPANY IS FORMED AND DEFINES THE SCOPE OF COMPANY. IT DEFINES AND CONFINES THE POWERS OF THE COMPANY. IF ANY THING IS DONE BEYOND THESE POWERS THAT ACT WILL BE ULTRA VIRES THE COMPNY AND SO VOID.
SO 2( 56) OF THE COMPANIES ACT 2013” MEMORANDUM OF ASSOCIATION OF A COMPANY  AS ORIGINALLY FRAMED OR ALTERED FROM TIME TO TIME IN PURSUANCE OF ANY PREVIOUS COMPANY LAW OR OF THIS ACT.




DEFINITIONS
CAIRNS,” MEMORANDUM OF ASSOCIATION OF A COMPANY IS ITS CHARTER AND DEFINES THE LIMITATION OF THE POWERS OF  A COMPANY.
BOWEN,” MEMORANDUM CONTAINS THE FUNDAMENTAL CONDITIONS UPON WHICH ALONE THE COMPANY IS ALLOWED TO BE INCORPORATED”

IMPORTANCE AND PURPOSE
IT IS THE CONSTITUTION OF THE COMPANY AND IT CONTAINS THE FUNDAMENTAL CONDITIONS UPON WHICH THE STRUCTURE OF THE COMPANY IS BASED. A COMPANY CAN NOT GO BEYOND IT, IT DEFINES THE RELATION WITH THE OUTSIDE WORLD AND THE SCOPE OF ITS ACTIVITIES.
AFTER REGISTRATION IT BECOMES THE PUBLIC DOCUMENT, IT SHOULD COMPLY WITH THE PROVISIONS OF THE COMPANIES ACT AND OTHER  DOCUMENTS OF THE COMPANY SHOULD SATISFY MEMORANDUM.
IT IS PUBLIC DOCUMENT AND AVAILABLE FOR INSPECTION.
IT SERVE THE FOLLOWING:-
I.            THE INTENDING SHAREHOLDER WHO IS PLANNING TO INVEST IN THE COMPANY WHERE HIS FUNDS WILL BE USED
II.            ANY ONE WHO DEALS WITH THE COMPANY LIKE CREDITORS WILL KNOW THE BOUNDARIES AND POWERS OF THE COMPANY.
  • AT LEAST SEVEN PERSON IN CASE OF PUBLIC COMPANY
  • AT LEAST TWO PERSON IN CASE OF PRIVATE COMPANY
  • AT LEAST ONE PERSON IN CASE OF ONE PERSON COMPANY
o    MUST SUBSCRIBE THEIR NAMES TO THE MEMORANDUM.
o    PERSON COMPETENT TO ENTER INTO CONTRACT CAN SUBSCRIBE. ALSO INCLUDES ARTIFICIAL PERSONS.
o    UNEDUCATED SUBSCRIBER THE THUMB IMPRESSION OR MARK SHOULD BE DULY ATTESTED
·         PRINTING AND SIGNING OF MEMORANDUM( RULE 13 OF COMP ACT 2014)
·         SHALL BE PRINTED. COMPUTER PRINTING IS ALSO RECOGNIZED.
·         DIVIDED INTO PARAGRAPHS  AND SHALL BE SIGNED BY EACH SUBSCRIBER WITH HIS ADDRESS,DESCRIPTION AND OCCUPATION IN THE PRESENCE OF AT LEAST ONE WITNESS

FORM OF MEMORANDUM U/S 4 AND 5:
TABLE A FOR COMPANY LIMITED BY HAVING SHARE CAPITAL
TABLE B FOR A COMPANY LIMITED BY GUARANTEE NOT HAVING SHARE CAPITAL

FORM
TABLE C FOR A COMPANY LIMITED BY GUARANTEE AND HAVING SHARE CAPITAL
TABLE D FOR UNLIMITED COMPANY AND NOT HAVING SHARE CAPITAL
TABLE E FOR UNLIMITED COMPANY AND HAVING SHARE CAPITAL
COPIES OF MEMORANDUM AND ARTICLES MUST BE GIVEN TO MEMBERS ON TOKEN CHARGES OF RS ONE .


CONTENTS OF MEMORANDUM
NAME CLAUSE :-FIRST CLAUSE IS NAME CLAUSE. AS COMPANY IS LEGAL PERSON SO IT SHOULD HAVE NAME.
IN CASE OF PUBLIC LTD  THE LAST WORD SHOULD BE LTD
IN CASE OF PRIVATE COMPANY THE LAST WORD SHOULD BE PVT LTD
IN CASE OF ONE PERSON COMPANY THE LAST WORD SHOULD BE (OPC)
NO COMPANY SHALL BE REGISTERED WITH THE NAME WHICH IS PROHIBITED,UNDESIRABLE OR IDENTICAL WITH EXISTING COMPANY.
NAME CLAUSE
AS PER RULE 8 OF THE COMPANIES (INCORPORATION RULES) A PROPOSED NAME IS UNDESIRABLE IF IT :
  1. RESEMBLES WITH THE NAME OF THE COMPANY IN EXISTENCE
  2. INFRINGEMENT OF THE REGISTERED TRADE MARK
  3. VIOLATION OF THE PROVISIONS OF THE EMBLEM AND NAME
    IV.            ( PREVENTION OF IMPROPER USE ACT)
. NOT OFFENSIVE TO THE ANY SECTION OF THE PUBLIC

ONLY GOVT COMPANY IS PERMITTED TO USE STATE WORD IN NAME
ALSO IF THE PROPOSED NAME IS CONTAINING THE NAME OF CONTINENT,COUNTRY,STATE,CITY SUCH AS ASIA LIMITED,AUSTRALIA LIMITED WILL NOT BE PERMITTED.
IN CASE OF CHARITABLE COMPANIES THEY MAY NOT USE THE WORD LIMITED
THE COMPANIES WHO ARE FORMED TO PROMOTE ART,SCIENCE,RELIGION ETC IF THEY DO NOT PAY DIVIDEND BUT UTILIZING THE PROFIT IN THE WORKING OF THE COMPANY,THEY MAY DROP THE WORD LIMITED
PUBLICATION OF NAME
EVERY CO IS REQUIRED TO PUBLISH ITS NAME OUTSIDE ITS REGISTERED OFFICE AND OUTSIDE EVERY PLACE WHERE IT CARRY THE BUSINESS.
NAME SHOULD BE ENGRAVED ON THE SEAL AND NAME ON ALL BUSINESS LETTERS,BILL HEADS,NOTICES AND THE OFFICIAL PUBLICATION OF THE COMPANY.
IN CONTRAVENTION OF THE PROVISIONS  COMPANY AND ITS OFFICER SHALL BE LIABLE TO FINE UPTO RS 1000 FOR EACH DAY DEFAULT.
REGISTERED OFFICE CLAUSE
( SEC4(1)(b)
THE NAME OF THE STATE WHERE THE REGISTERED OFFICE OF THE COMPANY IS TO SITUATED
SUCH OFFICE MUST BE IN EXISTENCE ON AND FROM THE 15 TH DAY OF ITS INCORPORATION. NOTICE AND EVERY CHANGE SHOULD BE GIVEN TO REGISTRAR WITH IN 15 DAY .
PERMANENT ADDRESS AND RESIDENCE OF THE COMPANY AND ALSO DETERMINES THE DOMICILE OF THE COMPANY.
ADDRESS OF REGD OFFICE MUST BE SPECIFIED IN CORRESPONDENCE. IF ANY DEFAULT IS MADE COMPANY AND EVERY OFFICER IN DEFAULT WHICH MAY EXTEND TO 1000 FOR EVERY DAY AND IT MAY GO UP TO 1,00,000
IMPORTANCE OF REGD OFFICE
PERMANENT ADDRESS AND RESIDENCE OF THE COMPANY AND ALSO DETERMINES THE DOMICILE OF THE COMPANY
ALSO DETERMINES THE JURISDICTION OF THE COURT
PLACE OF MAINTAINING OF VARIOUS REGISTERS,ACCOUNT BOOKS AND RECORD
OFFICIAL ADDRESS FOR RECEIVING CORRESPONDENCE
ANNUAL GENERAL MEETING OF THE COMPANY MUST BE HELD IN CITY OR TOWN IN WHICH THE REGISTERED OFFICE IS SITUATED.
OBJECTS CLAUSE SEC 4(1)(C)
DEFINES THE LIMIT AND EXTENT OF THE ACTIVITIES OF THE COMPANY.
OBJECTIVES CLAUSE DIVIDED INTO TWO PARTS
  1. OBJECTS TO BE PURSUED ON INCORPORATION ( MAIN CLAUSE).IF THE MAIN OBJECTS FAILED TO MATERIALIZE THEN TRIBUNAL MAY ORDER WINDING UP
  2. MATTERS WHICH ARE NECESSARY FOR FURTHERANCE THEREFORE.NO NEW BUSINESS CAN BE COMMENCED MENTIONED UNDER THE OBJECTS UNLESS PRIOR APPROVAL OF THE SHAREHOLDERS IS TAKEN BY SPECIAL RESOLUTION.
LIABILITY CLAUSE( SEC 4(1)d
NATURE OF THE LIABILITY
OMITTED FROM THE MOA OF UNLIMITED COMPANY
ANY ALTERATION IN MOA FORCING THE MEMBERS TO TAKE UP MORE SHARES OR WHICH INCREASES THEIR LIABILITY NULL AND VOID
IF A COMPANY CARRIES ON BUSINESS MORE THAN SIX MONTHS IF THE NUMBER FALLS BELOW STATUTORY LIMIT ALL THE DEBTS CONTRACTED AFTER SIX MONTHS.
CAPITAL CLAUSE SEC (4)(1)(e)
MOA LIMITED BY SHARES MUST STATE THE AUTHORIZED OR NOMINAL SHARE CAPITAL. ,DIFFERENT KINDS OF SHARES
PUBLICATION OF AUTHORIZED AS WELL AS SUBSCRIBED AND PAID UP CAPITAL
ASSOCIATION OR SUBSCRIPTION CLAUSE (13)(4)(c)
WE THE SEVERAL PERSON WHOSE NAME AND ADDRESSES ARE SUBSCRIBED ARE DESIROUS OF BEING FORMED INTO COMPANY IN PURSUANCE OF THE MOA AND WE RESPECTIVELY AGREE TO TAKE THE NUMBER OF SHARES IN THE CAPITAL SET OPPOSITE OUR RESPECTIVE NAMES
MUST BE SIGNED BY EACH SUBSCRIBER IN THE PRESENCE OF AT LEAST ONE WITNESS WHO ATTEST THE SIGNATURES
NOMINATION CLAUSE(OPC)
DESCRIBE THE NOMINEE IN THE EVENT OF DEATH OF THE SUBSCRIBER. PRIOR WRITTEN CONSENT OF THE NOMINEE IN FORM INC 3,NOMINATION IN FORM INC 2. SHALL BE FILED AT THE TIME OF INCORPORATION.
OBJECT CLAUSE
IN CASE OF NON TRADING COMPANY WHOSE OBJECTS ARE NOT LIMITED TO ONE STATE .MUST SPECIFY THE STATES TO WHOSE TERRITORIES THE OBJECTS EXTEND.
VERY IMPORTANT CLAUSE IT SHOWS THE OBJECTS FOR WHICH IT IS FORMED. IT ALSO HIGHLIGHT THE POWER AND BOUNDARY TO ACHIEVE ITS OBJECTIVES.

COMPANY INCORPORATION RULES
TH E FOLLOWING WILL NOT BE TAKEN INTO ACCOUNT IN DETERMINING WHETHER THAT NAME RESEMBLES WITH EXISTING COMPANY:
THE WORD PVT,(P).LTD,LIMITED,LLP,LIMITED LIABILITY PARTNERSHIP ETC
USING AT THE END COMPANY,AND COMPANY
THE PLURAL VERSION OF ANY OF WORDS APPEARING IN THE NAME
SPACING BETWEEN LETTERS,PUNCTUATION 

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