The memorandum of association is a document that regulates a company's external activities. It defines the purpose, objectives, and scope of the proposed company. The memorandum must include clauses for the company name, registered office location, objectives of the company, share capital structure, and share subscriptions by founding members. The memorandum forms the legal framework for the company and is difficult to alter, requiring a special resolution and government approval. Key information like the company name and objectives cannot be changed without following strict procedures.

1. P R E S E N T E D B Y W O R K I N G G R O U P Y 2
MEMORANDUM
OF ASSOCIATION
LEGAL ASPECTS OF BUSINESS -
PRESENTATION

2. Definition
Contents of Memorandum
Alteration of Memorandum
Memorandum of Association
Topics to be Covered:

3. Memorandum
of Association
DEFINITION OF MEMORANDUM OF ASSOCIATION
It's a document which regulates a company's external activities
It's created to define the purpose and objective of the business by the
promoter
DEFINING MEMORANDUM
Defines the scope and limitations of the proposed company
Mandatory requirement to incorporate a new company
Difficult to change or amend as it defines certain powers, the company
cannot go beyond
It becomes a public document as soon as the company gets registered
It forms the outer framework within which the company operates

4. Memorandum
of Association
CONTENTS OF MEMORANDUM
As per Section 4 of Companies Act, 2013, the memorandum of a limited
company can be divided on 6 distinct clauses:
Contains the name of the company
Existing company name cannot be used
Names considered undesirable by the Central Gov. cannot be used
Names prohibited under the Names and Emblems Act cannot be used
Change of name can be done by passing a special resolution at a GM or by
means provided in the Articles
A public and a Pvt company's name must end with 'Limited' and 'Private
Limited'
1. Name Clause -

5. Memorandum
of Association
Contains the state in which the registered office of a company is situated
The registered office is the official address of the company
Address to be communicated to the RoC within 30 days of incorporation
Notice of every change of the situation of its verified office shall be given to
the RoC within 30 days of the change
The name and address needs to be affixed in every office in a legible way
Both the Local Language and English should be used for the name
Company must have it's name engraved in all official publications
2. Registered Office Clause -

6. Memorandum
of Association
3. Objects Clause -
Defines the activities a company can carry on and those it cannot
The Clause must state :
Objects must specify all territories where it's operations are involved
- Objects to be pursued
- Matters neccessary to support the objectives
Doctrine of Ultra Vires -
An act which is beyond the powers of the company and is therefore void
Consequences of an Ultra Vires Act -
Company cannot sue any person
Directors will be held personally liable to outsiders
Exceptions -
An act can be ratified if it's intra vires of company
If Ultra Vires - Articles, but Intra Vires - Memorandum, the articles can be altered
Acquiring a property through Ultra Vires

7. Memorandum
of Association
5. Capital Clause -
Applicable for cases companies having share capital
Mentions the amount of share capital with which the company is to be
registered
Division of shares in fixed amount
Number of shares which the subscribers agree to subscribe , not less than 1
share
Issued share capital cannot be more than the max amount of share capital
Increase in number of shares, increase in liability
Members of a registered unlimited company have unlimited liability
If company continues to function with less than the legal minimum number
of shareholders, the members are liable for the then constracted debts
Contains nature of the liability of the members - limited or unlimited
Exceptions:
4. Liability Clause -
6. Subscription Clause -
Contains number of shares subscribed by each subscriber

8. Alteration of
Memorandum
A memorandum can be altered by passing a special resolution by following
the procedure mentioned in the Companies Act.
A company limited by share capital may also alter capital clause of its
memorandum in it's general meeting
Procedure for Altering the Memorandum :
Prior Approval by Central Govt. for name change
Change in the name needs to be approved by the Registrar and will be effective only after issue of new certificate
Mandatory approval of Central Govt. for alteration of office address from one state to the other
Disposal of application by Govt. after checking the provisions made by the company
In case of an alteration in it's memorandum, the company will provide - Special resolution and Central govt. approval
For transfer of office to another state, certified copy of order from the govt needs to be submitted with the registrar
Special resolution can be passed to change objects which has raised from public through prospectus and still has
unutilized amount
The alterations will be registered by the registrar within 30 days of filing the resolution
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