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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
l
with
y
any of the previous
CHA
RTE
Co mp u lsor
R
companies
Fo r law or the Companies
Con
o r
stitu
egiisttrattii
Act,
R
on
1956.” of th
e
tion
co.
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CONTENTS OF
MEMORANDUM OF
ASSOCIATION

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

PUBLI PRIVAT
C E
CO. CO.

LIMITE PVT
D 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 4
 N O F THE
LOCA
TIO F FICE
D O
GISTERE
RE

OR
SS F
D RE
IAL AD
OFFIC
TRA TION
REG IS

RE CORDS
OOKS AND
B T.
KEP

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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
would buycontemplate
for the occasionally hiring out
company. Develop
theMemorandum
a car they 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
S.N2,00,000 Name & No . Of equity Signature
O Addresses Name / shares taken by of
description addres each subscriber s
& subscriber
occupation descrip
of tion
subscribers and
occup
a
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 18
 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 = Beyon
d
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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