Memorandum of Association

The Memorandum of Association of a company is the most important document as it sets out the
constitution of the company. It is in fact the foundation on which the entire structure of the company
is based. It prescribes the name of the company, Its registered office, objects and capital clause also
defines the extent of its powers. A company can exercise only such power which are either
expressly stated therein or as may be implied therefrom including matters incidental to the powers
so conferred. Memorandum is therefore a document of great importance in relation to the proposed
company. It is in fact a charter of the company. The word 'Memorandum' is defined under subSection 2(56) of the Companies Act 2013, as Memorandum means Memorandum of Association of
a company as originally formed or alter from time to time in pursuance of any previous companies
law or of this act. The Memorandum of a company serves two main purpose, Firstly the prospective
shareholders can the field in which their funds are going to be used by the company and the purpose
of the enterprise so that they can contemplate the risk involved in their investment. Secondly, the
outsiders dealing with the company can know exactly hr objects of the company and whether the
contractual relation which they intend to enter into with the company is withing the objects of the
company.
The companies act prescribes 4 different form of memorandum which are applicable to different
classes of companies and one of there or one as near thereto as circumstances admit has to be
adopted. Specimen forms of Memorandum for different kinds of companies are set out in schedule
1 in the form of table A,B,C,D and E.
The Memorandum of a Company must contain the following fundamental clauses which have often
been described as the conditions of its incorporation:(a) Name Clause
(b) Registered Office Clause
(c) Objects Clause
(d) Limited Liability Clause
(e) Capital Clause
(f) Association Clause
Section 10 of the Companies Act 2013 , provides that the memorandum (and articles), when
registered bind the company and its members to the same extent as if they have been signed by the
company and by each member to abide by all the provisions contained therein. This is applicable to
every member irrespective of the fact whether he became a member through allotment , transfer or
transmission of shares. The binding nature of a duly registered memorandum (and articles) affects
the member only in the capacity of member of the company and not in any other way.
Sub-section (2)
of section 10 of the companies act 2013 makes it clear that all amounts payable by any member to
the company under the memorandum or articles shall be a debt due from him to the company.

STATEMENT OF PROBLEM
To determine the extent and bindingness of the Memorandum of Association and various provisions
regarding the alteration of different clauses of Memorandum.

OBJECTIVES
To focus on the purpose and nature and determinants on which the executive and management
functions of the company relies.

NATURE OF STUDY
Doctrinal research by referring books and online resources for articles and journals
The research is Explanatory in nature.

TENTATIVE CHAPTERISATION
1.
2.
3.
4.
5.
6.

Introduction
Historical Background
Object and Purpose of Memorandum of Association.
Alternation under Memorandum of Association.
Other provisions regarding Memorandum of Association.
Critical Analysis and Conclusion.

Survey of Literature
Books
Company Law
by Avatar Singh
Company Law (CS-Executive) (July 2016 Edition)
by Tejpal Sheth
Company Law (CS-Executive) (2nd Edition, August 2016)
by N.S. Zad
Company Law (A Comprehensive Text Book on Companies Act, 2013)
by Dr. G K Kapo
Company Law
by S.R.A. Rosedar
Lectures On Company Law: Covering The Companies Act, 2013 And Limited Liability Partnership Act,
2008

Journal
corporatelawreporter
Law and financial markets review (LFMR)