Contents of Memorandum of Association (MOA)

Meaning:

The Memorandum of association is the constitution of the company. Everything that the company does must be in conformity with this document. Exceeding what this document provides for would amount to an ultra vires act. Every shareholder is advised to read this important document while investing in the company.

Contents:

1. Name clause

2. Registered Office Clause 

3. Liability Clause

4. Capital Clause

5. Objects Clause

1. Name Clause:
Every company needs a name. Such name must not be one that is undesirable by the government or one that infringes trade mark of another company. The Trade Mark Act 1999 governs this procedure of granting a name to the company. The company can use the name permanently once it acquires central government approval. The name should be one that gives correct information about the company, incorrect usage of the world international,intercontinental etc for companies that have only a local operation are not allowed. A private company must affix the word private limited after its name and a public limited company must affix the word limited after its name. A company can alter its name if its wishes too, but it would need central government approval.

2. Registered Office Clause:
Every company must have a registered office in any Indian state. A company can have only one registered office. A registered office is the place where the company keeps all its books of accounts and the shareholders register along with other statutory documents. Any shareholder can access a registered office to inspect the books of accounts of the company and other documents. Failure to maintain such statutory books in the registered office would attract a fine or a penalty to the officer who's duty it was to do so. A registered office can be shifted from one state to another state only if its beneficial to the share holders and if it would improve the locale of the company. Prior permission of the company law board would be needed to this along with special resolution passed by the share holders.

3. Liability Clause:
The liability clause would specify the kinds of liability the shareholders and the members would have. Liability can be limited or unlimited. Under limited liability the shareholder is expected to pay up only the amount of the share he has invested in . Under unlimited liability the share holder can be held liable much more than the value of the share he has invested in ,moreover unlimited liability can lead to personal liability too.

4. Capital Clause:
This clause specifies the authorized capital of the business.  . A private company needs a minimum capital of one lac rupees and a public limited company needs a minimum capital of five lac rupees. The capital of the company cannot go below the minimum level but it can exceed it depending on whats provided in the articles of association.

The memorandum of association must be subscribed by at least 7 persons in case of public limited and 2 persons in case of private limited companies.

5. Objects Clause:
This clause contains the objects of the company. That is the purpose for which such company is formed. The object clause shows to us the kinds of business the company is entitled to carry on. The company can carry on business that are ancillary to the ones mentioned in the objects clause but it cannot carry on one which is not germane to the original objects.The objects clause helps the creditors to know as to what their money is being used for and gives a better sense of security. The objects can be altered by passing a special resolution, the conformity of the company law board is not a necessity here.