WLC 12 CHAPTER 3

MEMORANDUM OF ASSOCIATION
Definition
Sec 2 (28) means the Memorandum of Association
as originally framed
altered from time to time
Definition does not specify nature and importance of MOA
Business parlance - It is Constitution of the Company

IMPORTANCE OF MOA
• MOA is Charter of a Company an defines its limitations and
powers (Ashbury Railway Carriage Co. Ltd v Richie)
• It contains objects for which Company is formed, beyond
which it cannot go
• It enables the stakeholders to know with certainty the
objects for which the company is formed and ambit within
which it can function

FORMS OF MOA [Sec 14]

Table B Table C Table D Table D

Company Ltd Co. Ltd by Co. Ltd by Unlimited
by shares Guarantee not Guarantee with Company
having SC SC

CONTENTS OF MOA [Sec 13]

• MOA of every company shall contain:-
Clause I Name clause  As approved by ROC
 Must contain `Ltd.` or `Pvt. Ltd
 Sec 25 companies may be granted
licence not to suffix
 Guidelines issued for approval
Grounds for refusal
 Identical with or nearly resembles,
phonetical similar to name of existing
company
Clause II Domicile/situation/  Name of State where the Registered office
Registered office  Upon registration, postal address with
clause nearest Police Station
LECTURES BY PROF. S N GHOSH
WLC 13 CHAPTER 3

Clause III Objects clause A (i) Main Objects

(ii) Objects incidental or ancillary to the
attainment of main objects
B Other Objects
 Objects may take up on
incorporation/anytime
 This clause may contain as many as
such objects as the company deems
appropriate
 Commercial document
Clause IV Liability clause  States liability of members (at the time of
liquidation)
Clause V Capital clause  States amount, division thereof in No. and
face value of Capital company is authorized
to raise
Clause VI Association clause  Subscribers to MOA assent to form an AOP

PRINTING AND SIGNATURE

MOA shall be
 Printed
 Divided into paragraphs, consecutively numbered
 Signed by each subscriber/his POA, with name,
address, occupation, no of shares subscribed

DOCTRINE OF ultra vires

Ultra – beyond vires – powers [Beyond the powers]
Purpose of doctrine
• To protect investors
 To know for which their money is employed
 To ensure that company funds are not dissipated
for unauthorized purpose

Ashbury Rly. Carriage and Iron Co. v Riche

Object - `Mechanical Engineers and Contractors`
Company entered into agreement – Financing construction of
Railway track
Held – ultra vires

LECTURES BY PROF. S N GHOSH

WLC 14 CHAPTER 3

ALTERATION OF MOA
I. Name Clause II. Registered office III. Objects
Clause
Within Within One
city same State to
State another
Sec.17A [Sec. 17]
How suo moto CG direction Board Resl. Ord. Resl. Spl Resl Spl. Resl.
Any time [Rectification]
Spl Resl.
Grounds Business  Name Business Same (a) to carry on
expedienc identical with expediency business more
y existing Co.  Ord. economically and
 Approval Resl. efficiently
thru (b) to attain main
inadvertence purpose by new
 CG Differen improved means
direction t ROC (c) to
within 12  Ord enlarge/change
months of . Resl. local areas o
registration/  RD operations
name approval (d) to carry on
approval some business
which may
conveniently and
advantageously be
combined with
existing business
(e) to
restrict/abandon
any objects
(f) sale of
undertaking
(g) amalgamation
Alteration of MOA (Contd.)

IV. Liability clause V. Capital clause

How Members agree in Ordinary Resolution
writing
Grounds Business 1. Increase Authorised capital
expediency by issue of fresh shares
2. Consolidation/sub-division of
shares
3. Conversion of shares into
stocks/vice versa
4. Diminution of share capital
LECTURES BY PROF. S N GHOSH
WLC 15 CHAPTER 3

(not taken up by members)

LECTURES BY PROF. S N GHOSH