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Memorandum and Article of association of Company - Coggle Diagram
Memorandum and Article of association of Company
Memorandum (Sec 2(56)))
“Memorandum of Association of a Company
as originally framed or altered from time to time
in pursuance of any previous Companies Law or of this Act”
Memorandum meaning:
It is the charter of a Company.
It contains the objects for which the Company is incorporated.
It defines the possible scope of operations of the Company.
Case Law
Ashbury Railway Carriage & Iron Co. Ltd. v. Riche
Purpose:
For 3rd parties
To provide information to the third parties as to whether the contracts
they are intending to enter into with the Company are within the object
clause of the Company or not.
For shareholders
To provide information to the intending shareholder regarding the
purpose for which his money is going to be used by the Company and the
amount of risk he is taking in making the investment.
FORMAT OF MEMORANDUM SEC 4(6)
TABLE A
Company Limited By shares
TABLE B
Company limited by Guarantee & Not having share Capital
TABLE C
Company limited by Guarantee & having share Capital
TABLE D
Unlimited Companies & Not having share Capital
TABLE E
Unlimited Companies & having share Capital
Contents of Memorandum Section 4
1) Name clause
Case Law
Atlas Cycles (Haryana) Ltd. Vs. Atlas Products Pvt. Ltd (2008)
Case Law
Ewing V Buttercup Margarine Co. Ltd
2) Situation or Registered Office Clause (Sec 12(1))
The company shall furnish to the
ROC verification of its registered office within 30 days of its incorporation in Form INC-
22.
3) Objects Clause
a. The objects to be pursued, by the company on its incorporation are:
b. Matters which are necessary for furtherance of the objects specified in clause 3(a) are
4) Liability Clause
5) Capital clause (Only in case of Company having Share Capital)
6) Association or Subscription clause
7) Succession Clause (Only in case of OPC)
REQUIREMENTS FOR MEMORANDUM
The MOA shall be Printed
Divided into paragraphs and numbered consecutively, Signed by each subscriber, who
shall mention his address, description and occupation, if any
The signature shall be made in the presence of at least 1 witness who shall attest the
signatures
Alteration of Memorandum of Association (MOA) Sec 13
(Alteration of Name Clause (Sec 13(2))
B. RECTIFICATION OF NAME (COMPULSORY CHANGE OF NAME)
Change of Registered Office Sec 13(4) & 13(7)
With the Local Limit of City Only
Pass a Board resolution
Notify ROC in INC-22 within 30 days
From one city to another within same state and same ROC
Pass a Board resolution in board meeting
Send Notice+E5 for EGM
Held EGM & Poss special resolution
Notify ROC in MGT-14+INC-22 IN 30 DAYS
Change from one city to another and from one ROC to another
Pass a BR in BM
Apply to RD in Form No.INC-23+other Documents
Send Notice + E/s to S/h for EGM
Held EGM and Pass SR
MGT-14+INC-22+INC-28 ROC
ROC TRFALL ROC2
From one state to another state
PASS A BR IN BM
Apply to RD in INC-23+other doc.
send notice +E/s to S/h for EGM
Held EGM and Pass SR
MGT-14+INC-22+INC-28 ROC
Case Law
Minerva Mills Ltd. vs. Government of Maharashtra
Alteration of Object Clause Sec (13)
The Company needs to file SR in the Form MGT-14
Alteration of Liability Clause
a. Limited to unlimited: All members must agree in writing
b. Unlimited to limited company: Such change shall not affect any existing debt, liquidity obligation or contract
Alteration of Capital Clause Sec 61
By increasing its authorized share capital by an issue of new shares
By Consolidating and dividing existing shares into shares of larger denomination
By sub-dividing shares into shares of smaller denomination than is fixed by the MOA
By converting fully - paid shares into stock or vice - versa
Cancelling the unsubscribed shares
Alteration of Capital Clause Sec 61
By increasing its authorized share capital by an issue of new shares
By Consolidating and dividing existing shares into shares of larger denomination
By sub-dividing shares into shares of smaller denomination than is fixed by the MOA
By converting fully - paid shares into stock or vice - versa
Cancelling the unsubscribed shares
Articles of Association Sec 2 (5)
"Articles" means Articles of Association of the company as originally framed or as altered
from time to time in pursuance of any previous company’s law or of this Act
Form and Contents of Articles Sec 5 [Section 5]
The AOA of a company shall be in respective forms specified in Tables, F, G, H, I and J in
Schedule 1 as maybe applicable to such company
Contents of AOA
1) Exclusion wholly or in part of Table F.
2) Adoption of preliminary contracts.
3) Number and value of shares.
4) Issue of preference shares.
5) Allotment of shares.
6) Calls on shares.
7) Lien on shares.
8) Transfer and transmission of shares.
9) Nomination.
10) Forfeiture of shares.
11) Alteration of capital.
12) Buy back.
13) Share certificates.
14) Dematerialisation.
15) Conversion of shares into stock.
16) Dividends and reserves
19) Indemnity.
20) Capitalisation of reserves.
21) Voting rights and proxies.
22) Meetings and rules regarding
committees.
23) Directors, their appointment and
delegations of powers.
24) Nominee directors.
25) Issue of Debentures and stocks.
26) Audit committee.
27) Managing director, Whole-time
director, Manager, Secretary.
28) Additional directors.
29) Seal.
30) Remuneration of directors.
31) General meetings.
17) Accounts and audit.
18) Winding up.
Entrenchment Provisions [Section 5]
The AOA may contain provisions for entrenchment to the effect that specified provisions
Alteration of Articles of Association [Section 14]
A company may, by a special resolution, alter its AOA including alterations
It stipulates that any alteration having the effect of conversion
Every alteration of the articles under this section and a copy of the order
Copy of altered AOA+ order of NCLT shall be filed with ROC in 15days
Restriction on Alteration of Articles of Association
Alteration must not exceed the powers given in MOA
Alteration must not be inconsistent with Companies Act
Alteration must be in the bonafide interest of company
Alteration must not be illegal
Alteration must not be against to public policy
No alteration regarding expulsion of member
Doctrine of ultra vires
The meaning of the term 'ultra vires' is beyond the powers of
Doctrine of Constructive Notice
The office of the ROC is a public office and documents filed or registered therewith are public
Doctrine of Indoor Management
This Doctrine is also termed as 'Turquand Rule' and was enunciated in the famous
Royal British Bank vs. Turquand
Exceptions to the Doctrine of Indoor Management
Doctrine of Alter Ego