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 Under Section 2(28) of the Companies

Act, 1956 the “Memorandum means the
memorandum of association of the
company as originally framed or as
altered from time to time in pursuance
with any of the previous
companies law or the Companies Act,
1956.” CH
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CONTENTS OF MEMORANDUM OF
ASSOCIATION

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1. Name Clause[ section 13(1)
(a)]

PUBLIC PRIVATE
CO. CO.

LIMITED PVT LIMITED

The company is free to choose any name but it must

not be undesirable or must not resemble the name of
any other registered company
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 O F THE
O C A TION FF IC E
L O
GIS T ERED
RE

R ES S FOR
I A L ADD N
OFFIC GISTRATIO
RE

ECO RDS
N D R
SA
BOOK KEPT.

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 An important clause

 Must be very drafted carefully;

 Determines the activities of the company.

 In it each and every detail of activities of the business

to be carried out must be laid down.

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 Main Object
To Be
Ancillary Pursued For
or Incorporation
incidental
to
attainment
of main
objective
Covers those
objectives not
covered under
‘main objects’

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 This clause states the nature of liability of the members of
the company .in the case of a company limited by share or
by guarantee the fact that the liability of its members is
limited must be made absolutely clear . In case of a
company limited by shares the liability of a member is
limited to the nominal value of the share held by him .if the
share are fully paid up his liability is nil. But in case of partly
paid-up shares the liability is limited to the amount which is
unpaid.
 In case of a company limited by guarantee ,the liability
clause must state the amount which every member
undertakes to contribute to the assets of the company in the
event of its winding up

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 This clause states that amount of the
capital with which the company is to be
registered .this clause should also state
the number and face value of shares into
which the capital of the company is
divided
 The capital with which the company is
‘registered’ or ‘nominal’ or ‘authorized’

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 The association clause states – in this
cause , the subscribes declare that they
desire to be formed into a company and
agree to take the shares stated against
their names .the names ,address and
occupation of the subscribers must be
given each subscriber must sign in the
presence of at least

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• Husband and wife, Niraj and Seema Mishra, based
in Mumbai, are forming a company. They want a
short name for the company with their surname in
it. The company is being formed to run a
restaurant. They project they would need 20 lakhs
as the capital of the company. Immediately, the
husband would contribute Rs. 2,00,000 to the share
capital of the company and wife Rs. 10. Mr. Mishra
hopes to find others, after the company is formed,
to take the shares of the company. They also
contemplate occasionally hiring out the car they
would buy for the company. Develop a
Memorandum of Association for the Company.

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I . The name of the company is Mishra Private
Limited
II. The registered office of the company will be
situated in the state of Maharashtra.
III. The objective for which the company is begin
established are as follows:
a. Main object: running of restaurants
b.Ancillary object : opening bank accounts,
hiring premises an running of bakery
c. Other objects: Hiring out of vechicles

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IV. The liability of the members is limited
v. The authorized share capital of the
company is RS.20,00,000,divided into
2,00,000
S.NO Name & No . Of equity Signature Name /
Addresses shares taken by of addres
description & each subscriber s
occupation of subscriber descrip
subscribers tion
and
occupa
tion of
witness

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 ALTERATION OF NAME CLAUSE

• Special Resolution.
• Written Approval of Central Government.
• No Approval of Central Government is
necessary if the change of name involves only
the addition or deletion of the word “Private”.
• Change by ordinary resolution and approval of
Central Government when name is identical or
too closely resembles the name of an existing
company.

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 CHANGE OF REGISTERED OFFICE

From one premises to another premises in the

same city, town or village

• By passing a resolution of Board of Directors

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 CHANGE OF REGISTERED OFFICE

From one town or city or village to another town

or city or village in the same state
1. Special Resolution.
2. Confirmation of Regional Director — when
jurisdiction of Registrar of companies is
changed.
3. Copy of (i) & (ii) to be filed with ROC.
4. Notice of new location to ROC within 30
days.

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 CHANGE OF REGISTERED OFFICE

From one state to another state

1. Special Resolution
2. Confirmation of Central Govt.
3. For certain Purposes only

(As given in section 17)

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 ALTERATION OF OBJECTS CLAUSE

A. Special Resolution
B. Alteration is sought on any of these grounds:
• To carry on its business more economically & more
efficiently
• To attain its main purpose by new or improved means
• To enlarge or change the local area of its operations
• To carry on some business which under existing
circumstances may conveniently or advantageously be
combined with the business of the company
• To restrict or abandon any of the objects specified in the
memorandum
• To sell or dispose off the whole or any part of the
undertaking
• To amalgamate with any other company
C. Copy of (A) is filed with ROC within 30 days
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 ALTERATION OF LIABILITY CLAUSE

• The liability of a member of a company cannot

be increased unless the member agrees in
writing.

• From unlimited liability, it can be made limited

by re-registration of the company.

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 ALTERATION OF CAPITAL CLAUSE

• A company can reduce share capital by first passing a

special resolution for reduction of capital .but powers to
reduce share capital must be guaranteed in the articles of the
company ,otherwise the share capital can be altered by
special resolution giving such powers
• The company can apply to the court by petition for getting
confirmation from the court for reducing the share capital .
The main duty of the court is to look after the interest of the
creditors and different classes of shareholders , and then
decide whether the company should be allowed to reduce
share capital .

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 DOCTRINE OF ‘ULTRA VIRES’

The words :
• Ultra means beyond
• Vires means the powers
• Ultra Vires means beyond the powers

A company which owes its incorporation to statutory

authority cannot effectively do anything beyond the
powers expressly or impliedly conferred upon it by the
statute or Memorandum of Association.

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 A document that specifies the regulations
for a company's operations. The articles
of association define the company's
purpose and lays out how tasks are to be
accomplished within the organization,
including the process for appointing
directors and how financial records will
be handled.

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 The important
 Powers, duties, rights and liabilities of Directors
 Powers, duties, rights and liabilities of members
 Rules for Meetings of the Company
 Dividends
 Borrowing powers of the company
 Calls on shares
 Transfer & transmission of shares
 Forfeiture of shares
 Voting powers of members

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 Unlimited Companies:
• The Articles of such a company must
state:
 Total number of members; and
 Share capital.
 Companies limited by Guarantee:
• Articles of such company must state
total number of members.
 Private Companies limited by shares:
• must include requirements of
Section 3(1)(iii).
No Article Company
 A public limited company having
share capital may be registered
without Articles.
 Ultra = Beyond
Vires = Power

Beyond the Power

Objective-To protect the investor’s

interests

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 Ultra vires the directors
 Ultra vires the articles
 Ultra vires torts committed by employees
of the company

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 Articles may be altered by a company
by passing special resolution at a
general body meeting of shareholders
 According to Section 610, every person
dealing with the company is deemed to
have read M/A and A/A and understood
the contents thereof in the correct
perspective.
 Doctrine of Indoor Management
 Rule of Indoor Management is an
exception to the Doctrine of Constructive
notice.
 Memorandum of Association Articles of Association

Charter of Company Regulations for internal management

Defines the scope of the activities Rules for carrying out the objects of
company.

Supreme document Subordinate to the memorandum.

Must for every company Company limited by shares need not

have it (Table ‘A’ applies)

Strict restrictions, alteration only with Can be altered by special resolution.

sanction of central govt./ tribunal.

It define the relationship between the It define the relationship between

company & the outsiders company & its staff and between
members & members interests
THANKS

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