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MEMORANDUM OF ASSOCIATION

WHAT IS MEMORANDUM OF ASSOCIATION?

The Memorandum of Association (MOA of Private Limited Company) sets down the constitution of a company containing certain fundamental matters. It is a basic document for the very existence of the company. Every Company must have its own Memorandum of Association. The MOA is the charter of the company which defines and limits the powers of a company for the information of the public at large.


The purpose of the Memorandum of Association is to display the permitted range of activities of a company for the guidance of shareholders, creditors and others. When you are incorporating your
Company, proper advice must be taken to form a proper Memorandum of Association to safeguard yourself and your business in the long term.

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CONTENTS OF MEMORANDUM OF ASSOCIATION

1. Name Clause:

The name of the Company must be stated with the last word ‘Limited’ in case of public companies and with the

last two words ‘Private Limited’ in case of private companies. The Companies Act provides that a company should

not be registered with an undesirable name. The question of desirability, or otherwise, of a name can only be

decided from the facts and circumstances of each case.


2. Situation Clause:  

The Memorandum of Association must mention the State in which the registered office of the company will be

located. That is, the domicile of the company should be stated for the determination of jurisdiction of the Court,

as well as of the Registrar. Within a particular domicile, there must be a registered office, intimation of which must

be given either at the time of registration of within 30 days from the date of registration provided the company

does not commence business earlier than this period of 30 days.

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3. Object Clause:

Any number of lawful objects can be stated and included in this objects clause, whether the company engages

in all those activities or not. From legal view-point, this clause is ascribed the highest importance. Any activity

which offends the objects clause and is not expressly stated in the Memorandum of Association would be

considered ultra vires, i.e beyond the powers of the company.


4. Liability Clause

A company limited by shares or by guarantee must state that liability of its members is limited. This clause mainly affects the members. A company cannot increase the liability of a member without his / her written consent.

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5. Capital Clause:

The MOA of the company having a share capital is required to show the amount of share capital with which the company is going to be registered, and the division thereof into shares of a fixed value.


6. Association and Subscription Clause: 

An association clause signifying the desire of subscribers to form themselves into a body corporate should be appended in all cases at the foot of the Memorandum. The subscription clause provides that each subscriber

is to take at least one share in the company and is required to state the number of shares taken by him along

with his signature.

WHAT IS THE USE OF THE MEMORANDUM OF ASSOCIATION? 

The Memorandum of Association (MoA) helps establish the extent and scope of the business activities that a particular

company can carry out. The company can perform business activities that they have specified in the Memorandum of

Association (MoA). If you wish to expand your business activities into other areas of the market, you will have to make

changes to the memorandum accordingly.

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A Memorandum of Association (MOA) is a legal document applicable to limited liability companies. Limited Liability

Companies include Private Limited Company (Pvt Ltd) and Limited Liability Partnership (LLP). MOA is used to define the company’s relationship with the shareholders. The MOA is a document of public record i.e. anyone who wishes to see a company’s MoA can do so under the Right to Information (RTI) Act. MoA also describes the company’s name, the physical

address of the registered office, the names of shareholders and the distribution of shares. Sometimes, MoA also contains the exemptions and tweaks for a particular company. For eg..Private Limited Companies have a lot of exemptions as compare to other companies. Read Exemptions Private Limited Company.

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