MOA of Private Limited Company
MOA of Private Limited Company
The Memorandum of Association (MOA of Private Limited Company) sets down the constitution of a company containing certain fundamental matters. It is a basic document for the very existence of the company. Every Company must have its own Memorandum of Association. The MOA is the charter of the company which defines and limitsW the powers of a company for the information of the public at large. The purpose of the Memorandum of Association is to display the permitted range of activities of a company for the guidance of shareholders, creditors and others. When you are incorporating your Company, proper advice must be taken to form a proper Memorandum of Association to safeguard yourself and your business in the long term.
Memorandum of Association (MOA of Private Limited Company)
Contents of Memorandum of Association (MOA of Private Limited Company)
- Name Clause: The name of the Company must be stated with the last word ‘Limited’ in case of public companies and with the last two words ‘Private Limited’ in case of private companies. The Companies Act provides that a company should not be registered with an undesirable name. The question of desirability, or otherwise, of a name can only be decided from the facts and circumstances of each case.
- Situation Clause: The Memorandum of Association must mention the State in which the registered office of the company will be located. That is, the domicile of the company should be stated for the determination of jurisdiction of the Court, as well as of the Registrar. Within a particular domicile, there must be a registered office, intimation of which must be given either at the time of registration of within 30 days from the date of registration provided the company does not commence business earlier than this period of 30 days.
- Object Clause: Any number of lawful objects can be stated and included in this objects clause, whether the company engages in all those activities or not. From legal view-point, this clause is ascribed the highest importance. Any activity which offends the objects clause and is not expressly stated in the Memorandum of Association would be considered ultra vires, i.e beyond the powers of the company.
- Liability Clause: A company limited by shares or by guarantee must state that liability of its members is limited. This clause mainly affects the members. A company cannot increase the liability o a member without his / her written consent.
- Capital Clause: The MOA of the company having a share capital is required to show the amount of share capital with which the company is going to be registered, and the division thereof into shares of a fixed value.
- Association and Subscription Clause: An association clause signifying the desire of subscribers to form themselves into a body corporate should be appended in all cases at the foot of the Memorandum. The subscription clause provides that each subscriber is to take at least one share in the company and is required to state the number of shares taken by him along with his signature.
Articles of Association (AOA of Private Limited Company)
The document containing the Articles of Association (AOA) of a company is a business document; hence it has to be construed strictly. It regulates domestic management of a company and creates certain rights and obligations between the members and the company. The Articles of Association are in fact the by-laws of the company according to which directors and other officers are required to perform their function as regard the management of the company, its accounts and audit. Every company limited by guarantee or an unlimited or a private limited company is required to register its articles along with the memorandum of association. Section 31 vests companies with power to alter or add to its articles. A company cannot divest itself of these powers. Matters as to which the memorandum is silent can be dealt with by the alteration of article. The alteration must be effected by special resolution.