One of the first steps in the journey of a company is registration. A company has to be registered after a thoroughly regulated process, of which Memorandum of Association (MOA) is a cornerstone. The origins of Memorandum of Association lies in English Laws. Even today, it is a statutory requirement in most commonwealth countries.
A Memorandum of Association is rightly regarded as the Constitution of a company along with Articles of Association. It is a detailed document which needs to be registered with the registrar of Companies.
What Are The Contents of a Memorandum Of Association?
A Memorandum of Association (MOA) should include particulars of the following description.
Name and Registered Address
It begins with the name of the company mentioned in full and specified as incorporated under the Companies Act, 1956. The name specified should not be deceptively similar to any other registered company.
The address of the registered office shall be mentioned in full. Establishing a registered office is a prerequisite for commencing business operations. The registered office shall be the official address for all communications with the authorities and the place where all important documents and registers shall be kept.
The main objectives to be pursued by the company immediately after incorporation is mentioned. For instance, it may be the purchase of a business along with that all assets, liabilities, pending contracts, rights, privileges and goodwill attached to it. The primary objective is specific to the nature of the industry.
This shall be the main objective of the company to which certain incidental objectives are bound to arise. Such objectives are further described in the memorandum.
For instance, it may mention carrying on of business in different parts of the country either directly or through agents;carrying on advertising through journals, periodicals, television, internet ads, cinema slides, etc; carrying on import/export of commodities profitable to the business; or promoting in research and development in all subjects.
All other objectives for which the company is established are mentioned in particular.
It may be of the following nature.
Acquiring in whole or part, any business of any organisation which may be a public or a private company, partnership firm or proprietorship.
Applying of patents, licenses or other intellectual properties that may create rights of exclusive or limited nature. Also purchase of sale of such intellectual properties.
Entering into joint venture , partnership or any other arrangement with another company, firm, or person with regard to any business which the company is authorised to carry on.
Entering into any agreement with Governments, corporations and other public/private authorities, and/or obtain concessions from such authorities for carrying out the authorised business activities.
Lending or advancing any money with or without securities and to invest and deal with the liquid assets of the company.
To raise money by issuing securities like shares or debentures charged upon any or all of the company’s properties of present or future including its uncalled capital and to purchase, redeem or pay off such securities.
To draw, accept, endorse, make or discount any negotiable instruments, securities whether transferable, negotiable or not.
To do all such things incidental or conducive to the attainment of any or all of the objectives mentioned in the memorandum.
A memorandum of association needs to be created only by limited companies. Thus, one of the most important clauses is added that the liability of the members is limited. Shareholders’ risk is limited only to the extent of the capital they have invested in the company.
The clause contains particulars about the capital of the company divided into shares of values that are mentioned. The number of shares allotted to each members are mentioned. All assets belonging to the company are also mentioned.
The association clause is a statement made by the founders that they are willing to form into a private/public limited company in pursuance of the memorandum of association.
This completes the memorandum of association (MOA).
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