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1


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.”
CH
Compulsory
Compulsory
Forr
Fo
Registration
Registration

A RT
ER
o
Co n r
stitu
of th tion
e co
.

2
CONTENTS OF MEMORANDUM OF
ASSOCIATION

3
1. Name Clause[ section 13(1)
(a)]
PUBLIC
CO.

LIMITED

PRIVATE
CO.

PVT LIMITED

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

4
E
OF TH E
ION
OCAT ED OFFIC
L
ER
EGIST
R
FOR
RESS
DD
IA L A
N
OFFIC GISTRATIO
RE

CO
ND R E
SA
BOOK KEPT.

RDS

5


An important clause



Must be very drafted carefully;



Determines the activities of the company.



In it each and every detail of activities of the business
to be carried out must be laid down.

6
Ancillary
or
incidental
to
attainment
of main
objective

Main Object
To Be
Pursued For
Incorporation

Covers those
objectives not
covered under
‘main objects’

7




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
8




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’
9


The association clause states – in this
cause , 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 each subscriber must sign in the
presence of at least

10
•

11

Husband and wife, Niraj and Seema Mishra, based
in Mumbai, are forming a company. They want a
short name for the company with their surname in
it. The company is being formed to run a
restaurant. They project they would need 20 lakhs
as the capital of the company. Immediately, the
husband would contribute Rs. 2,00,000 to the share
capital of the company and wife Rs. 10. Mr. Mishra
hopes to find others, after the company is formed,
to take the shares of the company. They also
contemplate occasionally hiring out the car they
would buy for the company. Develop a
Memorandum of Association for the Company.
I . The name of the company is Mishra Private
Limited
II. The registered office of the company will be
situated in the state of Maharashtra.
III. The objective for which the company is begin
established are as follows:
a. Main object: running of restaurants
b.Ancillary object : opening bank accounts,
hiring premises an running of bakery
c. Other objects: Hiring out of vechicles
12
IV. The liability of the members is limited
v. The authorized share capital of the
company is RS.20,00,000,divided into
2,00,000
S.NO

Name &
Addresses
description &
occupation of
subscribers

No . Of equity
Signature
shares taken by of
each
subscriber
subscriber

Name /
addres
s
descrip
tion
and
occupa
tion of
witness

13
ALTERATION OF NAME 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.
14
CHANGE OF REGISTERED OFFICE

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

15
CHANGE OF REGISTERED OFFICE

From one town or city or village to another town
or city or village in the same state
1. Special Resolution.
2. Confirmation of Regional Director — when
jurisdiction of Registrar of companies is
changed.
3. Copy of (i) & (ii) to be filed with ROC.
4. Notice of new location to ROC within 30
days.
16
CHANGE OF REGISTERED OFFICE

From one state to another state
1. Special Resolution
2. Confirmation of Central Govt.
3. For certain Purposes only
(As given in section 17)

17
ALTERATION OF OBJECTS CLAUSE
A. Special Resolution
B. Alteration is sought on any of these grounds:
• To carry on its business more economically & more
efficiently
• To attain its main purpose by new or improved means
• To enlarge or change the local area of its operations
• To carry on some business which under existing
circumstances may conveniently or advantageously be
combined with the business of the company
• To restrict or abandon any of the objects specified in the
memorandum
• To sell or dispose off the whole or any part of the
undertaking
• To amalgamate with any other company
C. Copy of (A) is filed with ROC within 30 days

18
ALTERATION OF LIABILITY CLAUSE

• 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.

19
ALTERATION OF CAPITAL 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 .
20
DOCTRINE OF ‘ULTRA VIRES’
The words :
• Ultra means beyond
• Vires means the powers
• Ultra 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.

21


A document that specifies the regulations
for a company's operations. The articles
of association define the company's
purpose and lays out how tasks are to be
accomplished within the organization,
including the process for appointing
directors and how financial records will
be handled.

22











The important
Powers, duties, rights and liabilities of Directors
Powers, duties, rights and liabilities of members
Rules for Meetings of the Company
Dividends
Borrowing powers of the company
Calls on shares
Transfer & transmission of shares
Forfeiture of shares
Voting powers of members

23


Unlimited Companies:
• The Articles of such a company must

state:
 Total number of members; and
 Share capital.


Companies limited by Guarantee:
• Articles of such company must state

total number of members.


Private Companies limited by shares:
• must include requirements of

Section 3(1)(iii).

No Article Company


A public limited company having
share capital may be registered
without Articles.
Ultra
Vires

=
=

Beyond
Power

Beyond the Power
Objective-To protect the investor’s
interests

26
27




Ultra vires the directors
Ultra vires the articles
Ultra vires torts committed by employees
of the company

28


Articles may be altered by a company
by passing special resolution at a
general body meeting of shareholders


According to Section 610, every person
dealing with the company is deemed to
have read M/A and A/A and understood
the contents thereof in the correct
perspective.



Doctrine of Indoor Management



Rule of Indoor Management is an
exception to the Doctrine of Constructive
notice.
Memorandum of Association

Articles of Association

Charter of Company

Regulations for internal management

Defines the scope of the activities

Rules for carrying out the objects of
company.

Supreme document

Subordinate to the memorandum.

Must for every company

Company limited by shares need not
have it (Table ‘A’ applies)

Strict restrictions, alteration only with
sanction of central govt./ tribunal.

Can be altered by special resolution.

It define the relationship between the
company & the outsiders

It define the relationship between
company & its staff and between
members & members interests
THANKS

32

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MOA AND AOA

  • 1. 1
  • 2.  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.” CH Compulsory Compulsory Forr Fo Registration Registration A RT ER o Co n r stitu of th tion e co . 2
  • 3. CONTENTS OF MEMORANDUM OF ASSOCIATION 3
  • 4. 1. Name Clause[ section 13(1) (a)] PUBLIC CO. LIMITED PRIVATE CO. PVT LIMITED 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 4
  • 5. E OF TH E ION OCAT ED OFFIC L ER EGIST R FOR RESS DD IA L A N OFFIC GISTRATIO RE CO ND R E SA BOOK KEPT. RDS 5
  • 6.  An important clause  Must be very drafted carefully;  Determines the activities of the company.  In it each and every detail of activities of the business to be carried out must be laid down. 6
  • 7. Ancillary or incidental to attainment of main objective Main Object To Be Pursued For Incorporation Covers those objectives not covered under ‘main objects’ 7
  • 8.   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 8
  • 9.   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’ 9
  • 10.  The association clause states – in this cause , 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 each subscriber must sign in the presence of at least 10
  • 11. • 11 Husband and wife, Niraj and Seema Mishra, based in Mumbai, are forming a company. They want a short name for the company with their surname in it. The company is being formed to run a restaurant. They project they would need 20 lakhs as the capital of the company. Immediately, the husband would contribute Rs. 2,00,000 to the share capital of the company and wife Rs. 10. Mr. Mishra hopes to find others, after the company is formed, to take the shares of the company. They also contemplate occasionally hiring out the car they would buy for the company. Develop a Memorandum of Association for the Company.
  • 12. I . The name of the company is Mishra Private Limited II. The registered office of the company will be situated in the state of Maharashtra. III. The objective for which the company is begin established are as follows: a. Main object: running of restaurants b.Ancillary object : opening bank accounts, hiring premises an running of bakery c. Other objects: Hiring out of vechicles 12
  • 13. IV. The liability of the members is limited v. The authorized share capital of the company is RS.20,00,000,divided into 2,00,000 S.NO Name & Addresses description & occupation of subscribers No . Of equity Signature shares taken by of each subscriber subscriber Name / addres s descrip tion and occupa tion of witness 13
  • 14. ALTERATION OF NAME 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. 14
  • 15. CHANGE OF REGISTERED OFFICE From one premises to another premises in the same city, town or village • By passing a resolution of Board of Directors 15
  • 16. CHANGE OF REGISTERED OFFICE From one town or city or village to another town or city or village in the same state 1. Special Resolution. 2. Confirmation of Regional Director — when jurisdiction of Registrar of companies is changed. 3. Copy of (i) & (ii) to be filed with ROC. 4. Notice of new location to ROC within 30 days. 16
  • 17. CHANGE OF REGISTERED OFFICE From one state to another state 1. Special Resolution 2. Confirmation of Central Govt. 3. For certain Purposes only (As given in section 17) 17
  • 18. ALTERATION OF OBJECTS CLAUSE A. Special Resolution B. Alteration is sought on any of these grounds: • To carry on its business more economically & more efficiently • To attain its main purpose by new or improved means • To enlarge or change the local area of its operations • To carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company • To restrict or abandon any of the objects specified in the memorandum • To sell or dispose off the whole or any part of the undertaking • To amalgamate with any other company C. Copy of (A) is filed with ROC within 30 days 18
  • 19. ALTERATION OF LIABILITY CLAUSE • 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. 19
  • 20. ALTERATION OF CAPITAL 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 . 20
  • 21. DOCTRINE OF ‘ULTRA VIRES’ The words : • Ultra means beyond • Vires means the powers • Ultra 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. 21
  • 22.  A document that specifies the regulations for a company's operations. The articles of association define the company's purpose and lays out how tasks are to be accomplished within the organization, including the process for appointing directors and how financial records will be handled. 22
  • 23.           The important Powers, duties, rights and liabilities of Directors Powers, duties, rights and liabilities of members Rules for Meetings of the Company Dividends Borrowing powers of the company Calls on shares Transfer & transmission of shares Forfeiture of shares Voting powers of members 23
  • 24.  Unlimited Companies: • The Articles of such a company must state:  Total number of members; and  Share capital.  Companies limited by Guarantee: • Articles of such company must state total number of members.
  • 25.  Private Companies limited by shares: • must include requirements of Section 3(1)(iii). No Article Company  A public limited company having share capital may be registered without Articles.
  • 26. Ultra Vires = = Beyond Power Beyond the Power Objective-To protect the investor’s interests 26
  • 27. 27
  • 28.    Ultra vires the directors Ultra vires the articles Ultra vires torts committed by employees of the company 28
  • 29.  Articles may be altered by a company by passing special resolution at a general body meeting of shareholders
  • 30.  According to Section 610, every person dealing with the company is deemed to have read M/A and A/A and understood the contents thereof in the correct perspective.  Doctrine of Indoor Management  Rule of Indoor Management is an exception to the Doctrine of Constructive notice.
  • 31. Memorandum of Association Articles of Association Charter of Company Regulations for internal management Defines the scope of the activities Rules for carrying out the objects of company. Supreme document Subordinate to the memorandum. Must for every company Company limited by shares need not have it (Table ‘A’ applies) Strict restrictions, alteration only with sanction of central govt./ tribunal. Can be altered by special resolution. It define the relationship between the company & the outsiders It define the relationship between company & its staff and between members & members interests