An organization is created when a group of individuals band together to accomplish a common goal. This is normally for a commercial reason. Companies are typically created to benefit from their operations. A business must be incorporated by applying with the Registrar of Companies (ROC).
This submission must be accompanied by a variety of papers. The MoA [full form Memorandum of Association] is one of the most important papers that must be presented with the incorporation application.
MOA full form – Memorandum of Association is a legal document that explains why the organization was founded. It establishes the company’s authority and the terms under which it works. It is a manual that includes all of a company’s laws and regulations for its interactions with the outside world.
Any business must have a Memorandum of Association that specifies the extent of its activities. The organization cannot work outside the limits of the document until it has been prepared. If the corporation goes beyond its authority, the activity would be deemed supra vires and therefore null.
It is the cornerstone upon which the business is built. The Memorandum of Association lays out the company’s entire organization.
The memorandum is open to the media. Thus, all that is expected of an individual who wishes to enter into contracts with the corporation is to pay the required fees to the Registrar of Companies and receive the Memorandum of Association. He will learn all of the company’s information from the Memorandum of Association.
It is the responsibility of everyone who does business with the firm to be aware of its memorandum.
A memorandum may take any of the forms mentioned in Tables A, B, C, D, and E of Schedule 1 under Section 4(5) of the Companies Act. Because of the various types of businesses, the tables are of various types.
Table A – It applies to a corporation with a share capital.
Table B – It applies to a limited-by-guarantee corporation that does not have a share capital.
Table C – It applies to a company with a share capital that is protected by a guarantee.
Table D – It can be used by any unrestricted corporation that does not have a share capital.
Table E – It can be used by any unrestricted company with a share capital.
The company memorandum should be typed, counted, and broken down into chapters. It can also be signed by the company’s customers
The Memorandum of Association is a crucial document that includes much of the company’s information. It controls the company’s interaction with its stakeholders. Section 3 of the Companies Act of 2013 states that a memorandum is required for the registration of a corporation.
Before registering the corporation with the Registrar, the involved parties may first agree to a memorandum.
As a result, a Memorandum of Association is required for company registration. According to Section 7(1)(a) of the Act, a company’s Memorandum of Association and Articles of Association must be properly signed by the subscribers and registered with the Registrar to be incorporated.
In addition to this, a memorandum contains other things. There are the following:
Here, all five of the clauses are mentioned and explained below:
|Name Clause:||This section determines the company’s name. The company’s name should not be the same as that of another business. Even, since it is a private entity, the term “Private Limited” should be included at the top.
In the case of a public corporation, the term “Limited” should be added to the end of its name.
|Registered Office Clause:||The name of the state in which the company’s registered office is located is specified in this clause. This aids in determining the Registrar of Companies’ authority.
Within 30 days of the company’s incorporation or commencement, the company must notify the Registrar of Companies of the site of its registered office.
|Object Clause:||This clause specifies the purpose for which the corporation was formed. The following three subcategories can be included under the objectives:
Main Objective – States the main business of the company
Incidental Objective – These are the objects that aren’t directly related to the company’s core goals.
Other objectives – Any other goals that the organization may achieve that aren’t covered in (a) and (b) above (b)
|Liability Clause:||It specifies the company’s members’ responsibility. In an unrestricted company, the members’ liability is unlimited, while in a company limited by shares, the members’ liability is limited by the balance outstanding on their share.
The members’ responsibility in a corporation limited by guarantee is limited by the amount each partner has agreed to pay.
|Capital Clause:||This provision specifies the overall amount of capital that a corporation can obtain, also known as the authorized/nominal capital.
This also illustrates how such a large sum of money is divided into a set number of shares.