Assignment On

CORPORATE LAW
Submitted to:

Prof. MOHSIN RANA

Submitted by:

GHULAM NABI ROLL NO: 209 6th C MORNING Semester

Hailey College of Commerce University of the Punjab

Memorandum of Association
Definition
The Memorandum of association is the most important documents, as it forms the charter of the company and is to say, the statutory deed of partnership. It contains fundamental conditions upon which alone the company is granted incorporation. It's purpose is to enable shareholders, creditors, and those deal with the company to know what it is permitted range of enterprise. It informs all persons what the company is formed to do and what capital has to do with. This document regulates the company external affairs.

Memorandum of association is also important as it is First step in formation of company. Fundamental rules of company are decided. Charter of incorporation. Decides objective and scope of company. Describes powers and liabilities. Decides relation with other companies.

Legal requirement:
Section 16,17,18 of companies ordinance 1984 deals with the Memorandum of association. Memorandum of Association, section 30 (whether the company is limited by shares or by guarantee or is unlimited) section 15(2) says that it must be signed

by at least seven persons, section 15(1). Any seven or more persons associated for any lawful purpose may by subscribing their name to a memorandum and complying to the requirement of companies ordinance 1984 in respect to registraton form a public company any two or more persons associated may in like manner form a private company section 15(1). no subscriber of memorandum of association shall take less than one share and subscriber shall write opposite his name the number of shares he takes under section 16(b)&(c), 17(c)(ii)&(iii) 18(b)(i)&(ii).

Obligations and liabilities of Subscribers:

the subscriber to the company's memorandum of association are under a statutory obligation to take and pay for the number of the shares set opposite their signatures sect ion 16,17,18. They must take their shares by allotment from the company, so that it is not sufficient for them to accept a renunciation or transfer of shares which has been alloted to other persons. If they undertake the share which has been alloted to other persons. If they undertake to take shares of a particular class, they must satisfy their statutory obligation by taking shares of another class.

Although the subscriber must pay for their shares,they need not pay in cash, they may pay it for transferring property to th company. Likewise where a new company is formed to purchase an existing company, the shareholder of the existing company who subscribed the new company's memorandum for the number of shares to which they are entitled under the arrangement satisfy the obligation to for them by concurring in the sale of the business which is the consideration for the allotment. The subscriber of the company's memorandum remain liable to take their shares

throughout the company's life and the obligation can be enforced against them when the company is being wound up. The company cannot release them from their obligation and any surrender of their rights to take the shares would be ineffective unless they have paid their nominal value to the company in full. But if the company issues the whole of its nominal capital to other persons, the subscriber are released from their obligation because the company now has no shares which it can allot to them and if any any of the shares alloted to the others persons are forfeited for non payment of calls, they cannot be compelled to take them up. On the other hand, if after issuing the whole of it's original nominal capital to other persons the company increases its capital so that it now has shares available for issue, the subscriber's obligation revives and they can be called upon to take the shares for which they subscribed out of the additional capital.

Form of Memorandum under section 29:

The form The memorandum of association of a company limited by shares. The memorandum of association limited by guarantee and not having a share The memorandum of association limited by guarantee and having a share The memorandum of association limited of an unlimited company having a

capital. capital. share capital.

Registration of Memorandum under section 30:

The memorandum shall be filled with the registrar in the province or part of

Pakistan not forming part of province,as the case may be, in which he registered office of the company is stated by the memorandum to be suitable section 30(1) . If the registrar is satisfied that none of the objects satisfied in the

memorandum is inappropriate or deceptive or in sufficiently expressive he shall retain and register the memorandum section 30(3). If the registration of the memorandum is refused, the subscriber of the

memorandum is refused, the subscriber of the memorandum or any one of them authorized by them in writing may either supply the deficiency and remove the defect pointed out or without 30 days of order of refusal prefer an appeal. Where the order of refusal has been passed by additional registrar, a joint Where the order of refusal has been passed or up held in appeal by registrar

registrar, a deputy registrar or an assistant registrar to the registrar. to the authority section 30(4). The order of Authority shall be final and shall not be called in question before the court or the other authority section 30(5).

Contents of Memorandum of Association:

Section 16,17,18 of companies ordinance 1984 lay down the particulars that are to be mentioned in memorandum of association of the company. For company limited by shares:

In the case of a company limited by share, the memorandum must state : Name of the company Place of its Registered Office. Objects of the company. That the liability of the members is limited. Amount of the Capital and the division thereof into shares of a fixed amount. The association clause and subscription clause under section 16.

Requirement of Memorandum of Association under section 16, 17&18:

The Memorandum of Association of a company, whether it is limited by shares or by guarantee or unlimited must comply to the following requirements. The memorandum of both public and private company limited by shares must

state the particulars specified in section 16. The memorandum of a company limited by guarantee must stat the

particulars specified in section 17(a). The memorandum of an unlimited company must state the particulars in

section 18(a). The memorandum of every company must be Printed divided into paragraphs numbered consecutively signed by subscribers and witnessed Dated (Section 19).

Signing of memorandum section 19( c):

The memorandum must full. His occupation father name in the case of a married woman or widow her husband's name in full. His nationality of origin. His usual residential address in full. Be Signed by each subscriber. Who shall add his name and surname in full, any former name or surname in

Alteration in Memorandum of Associations

Section 20 & 21 of companies ordinance 1984 deals with the provision of change in memorandum of association. The following steps are required in alteration in memorandum of association under the provision of companies ordinance 1984. 1.

Preliminary Discussion at board of directors meetings and company's

advisers to determine the best course to adopt and the precise nature of the desired alteration.

2.

Where company's shares are listed on a stock exchange, ensure

that the requirements of the stock exchange are fully and well understood and compiled with. 3. Prior consultation with some of the large shareholder,

creditors and the debenture holders to ensure so far as possible , that the
proposed change will be adopted. 4. Can any matter be settled be forehead with the registrar e.g whether a

new name meet with approval. 5.

Printing of notice of general meeting, explanatory circulars etc. Routine of convening and holding necessary meeting arrangements

6.

with the press, filing of copies of special resolution. 7. Whether new share certificates are to be issued or old certificates are

to be called in for alteration. 8. The printing of resolution required to be annexed to the memorandum

and to be registered with the registrar.

Alteration Generally
According to section 20, a company cannot alter the conditions contained in its memorandum except in the cases and in the mode and to the extent for which express provision is made by law. A company subject to the provision of the ordinance may by special resolution, alter the conditions contained in its

memorandum so as to Change the place of its registered office from one province to another or from

one city or town in a province to another or from a part of Pakistan not forming part of a province to a province or vice versa or With respect to the objects of the company, section 21.

The company is empowered to change any of the clauses contained in its memorandum of association, provided the legal formalities are fulfilled namely 1. 2. 2 . 4. 5. 6. Name Clause Situation of Registered office Objects Clause Limitation of liability Clause Capital Clause Subscription Clause

Alteration in Name Clause:

The name of the company can be changed or altered in any of the situated specified in section 38,39 & 21.

Alteration in Capital Clause:

A company can change its capital clause of its memorandum of association as under

Under section 92, for the purpose of the increasingly consolidating, subUnder section 96, for the purpose of reducing Capital. Under section 108, for the purpose of variations of shareholders rights. Under section 286, for the purpose of compromises and arrangements with

dividing or canceling the Capital.

creditors and members