Memorandum and Articles

Mangesh Patwardhan
 Memorandum of Association (MoA)
• Fundamental charter, constitution
• Notice to would be members, creditors and
others
• Doctrine of ultra vires – directors’ liability
• Public document – online
Contents
• Name – Ltd. / Pvt. Ltd. / OPC
 Memorandum of Association (MoA)
• Registered office
 Domicile – jurisdiction of Courts
 Communication
• Objects
 Notice to members, creditors
 Risk
 Social impact investments
• Liability
 Limited by shares / guarantee, unlimited
 Memorandum of Association (MoA)
• Share capital
 Authorized capital – min. 5 lakh (public ltd.), 1
lakh (pvt. Ltd.)
 Categories
 Number of shares
• Declaration clause by signatories

Alteration in MoA – special resolution +

(sometimes) central govt. Approval
Format
 Articles of Association (AoA)
• Default format in Act – if silent...
• Internal management
• `Entrenchment provisions’
Status of MoA, AoA
• Hierarchy, Act – MoA – AoA
• MoA, AoA contract between members and
company – economy
 MoA, AoA
• Outsiders - Doctrine of constructive notice –
substantive provisions
• Procedures – doctrine of indoor management
– unless knowledge, apparent authority
• Doctrine of ultra vires the company
 Void ab initio – no subsequent ratification
 Charitable contribution to further objects
(Mudaliar v. LIC 1963) – CSR?
 MoA, AoA
 Directors liable, derivative suit by
shareholders
• Ultra vires articles/ BoD
 Subsequent ratification possible