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What is Memorandum of Association or MOA
Memorandum of Association is an abbreviation of MOA. MOA of Company is the base of any company which is being registered. It is believed that MOA is the constitution of the Company and also it defines the scope of rights and responsibilities within which the business operates. Provisions of Law dominate in case there is any dispute between the Clauses in Memorandum and Companies Act.
Objects are the part of MOA or Memorandum of Association which defines the objectives and aim of the Company for which it is being incorporated. The Company should operate only within the object clause and it should not operate beyond the objects. In any situation, the company cannot act against the provisos of its Memorandum of Association, and if it acts so, such business dealing or transaction will be ultra vires and therefore void. Say, for instance, if the Company admits into a contract, any business dealings or agreement with any third party, the Memorandum of the company is used as a public document.
Memorandum of Association or MOA must be drafted following the format prescribed in Table A-F of schedule I of Companies Act 2013. As per the Table, the company can use depending upon its status or business type such as:
Tables
MOA of the companies
Table A
Companies limited by shares.
Table B
Companies limited by guarantee and have no share capital.
Table C
Companies limited by guarantee but have share capital.
Table D
Unlimited Companies.
Table E
Unlimited Companies and having a share capital..
Contents included in the MOA of the company
Memorandum of Association or MOA of the Company comprises of the following clauses:
Name Clause
This is the first clause drafted in every MOA and it shall mention the name of the Company along with the last word as Limited, OPC Private Limited, Private Limited and so on based upon the type of Company. This type of requirement needs not to be satisfied with Section 8 Company.
Registered Address Clause
It is the clause that states the name of the state in which the location the Company is registered.
Object Clause
It mentions the objects for which the Company is registered.
Liability Clause
It states the unlimited or limited liability of the members of the company.
Capital Clause
This is the last clause of the MOA which mentions the Capital investment of the Company. Authorized Capital investment of the company divided into a number of shares and it shall be specified by the Company under this clause. Authorized Capital is the amount of money up to which it can raise the fund for their business activities.
What is Object Clause in Memorandum of Association of the Company?
The detailed information of business activities to be performed by such Company after it is registered is specified in Object Clause of Memorandum of Association of the company. Business activities that are performed by the Company are included in the object clause and it is consist of two parts:
- Main Activities, and
- Activities adjuvant to the main business of the company
The Company is banned if the company carry on the business activities outside the assess of its objects. Following is the content of the object clause and the procedure for its rectification to conduct the business other than the remarked objects in the MOA of the company.
The Procedure to Amend Object Clause of the MOA of the Company
If the Company is willing to carry on the business activities which is not stated in its object clause, first the company have to amended to add the additional objects clause as per the secretarial procedure:
Conduct the Board Meeting
- Mail the notice of 7 days to conduct the Board Meeting to talk about the following agenda:
- Get the approval from the directors to amend the MOA’s object clause.
- Fix the venue, date and time to hold the Extra-Ordinary General Meeting to obtain
- approval of shareholders to amend the object clause.
- Sanction the notice of EGM with the agenda of the meeting to be discussed and an
- explanatory report under section 102 of Companies Act 2013.
Conduct EGM
Get the approval of shareholders of the company by a special resolution passed in duly held EGM. Such special resolution should be passed by the 3/4 of the majority of the members. In the case of named companies after passing the special resolution, the Company shall pass a copy of the special resolution and it’s preceding information to the stock exchange in which the company’s shares are listed. Special Resolution should be passed by Postal Ballot if the company falls under the following cases of companies:
- A company that holds more than 200 members.
- A Company that holds such money which remains unused which was raised by the issue of prospectus.
ROC Filing
Once the passing the Special Resolution is done, Company has to submit the resolution passed for the alternating process of object clause in MOA with the authorized Registrar in form MGT- 14 with the prescribed fee amount within 30 days of passing such special resolution. Here are the list of attachments shall be added on with the form:
- CTC of Special Resolution
- Notice of EGM
- CTC of Board resolution passed
- Altered MOA
Approval By ROC
On obtaining the receipt of the application, Registrar shall audit the same. After proper verification and satisfaction of the correctness of the application, the Registrar will approve the alteration and grant the registration certificate within 30 days of filing and submitting a Special resolution.
Reason to Amend Object Clause of the Company
Mentioned below are some of the reasons for which the Company alters its object clause of MOA, and it may or may not be the same:
- The Company may willing to carry on its business activities on a larger scale by increasing the scope of its business operations or activities.
- To achieve the goals which are already set by the Company using new or improved methods.
- To work on some additional business activities which can be easily combined with the existing business operations of the Company
- To sell or dispose of the portion of the company operations which can modify the structure of the business.
- In case, if the Company is getting coalesced or combined with other companies, then the company has to expand its existing object clause.
On receipt of the application, Registrar shall scrutinize the same. Upon satisfaction of the correctness of an application, it shall approve the alteration and certify the registration within 30 days of filing a Special resolution.
Frequently Asked Questions
Memorandum of Association is an abbreviation of MOA. MOA of Company is the base of any company which is being registered. It is believed that MOA is the constitution of the Company and also it defines the scope of rights and responsibilities within which the business operates.
A Company that holds such money which remains unused which was raised by the issue of prospectus. Before altering the object clause, such Companies shall pass a resolution, and such resolution shall be displayed or published in both English newspaper and vernacular newspaper.
Earlier object clause comprised of 5 clauses which are now deleted under Companies Act 2013, now it has only two object clause remain in new online form SPICe 33 for MOA, such as
- Main Objects; and
- Ancillary Objects.
New E-form 33 is an online SPICe form for MOA of the company which is filed while integrating the Company with SPICe 32 and SPICe 34. Therefore the Company needs not to submit this online form again with form MGT-14 for certification of alteration. Having a physical copy of MOA along with MGT-14 will be enough.
