The shares into which the capital is divided must be of fixed value, which is commonly known as the nominal value of the share. Further, it must state the names of each member and the number of shares against their names. Association or Subscription Clause :. This is the last clause. The memorandum has to be subscribed by at least seven persons in the case of a public company and by at least two in the case of a private company. Each subscriber must sign the document and must write opposite his name the number of shares he takes.
But no subscriber shall take less than one share. After incorporation, no subscriber can withdraw his name on any ground whatsoever. The MOA must clearly specify the desire of the subscriber to form a company. The MOA must specify the name of the person who becomes a member of the company in the event of the death of the subscriber.
Other Things Required:. Your email address will not be published. Close Menu About Us. Terms of Service. Privacy Policy. The entire business of the company is built as per the Memorandum of Association. A company has no right to undertake either any business or activity which is mentioned in the Memorandum. Also See: Types of Entrepreneurship. Here, in this article, we will discuss all the ins and outs of the MOA and how it is so imperative in the establishment of any company.
In simple words, the Memorandum of Association acts as the charter of the company by which the structure of any company is set up. Memorandum of Association is one of the basic incorporation documents of a limited company. Also See: Explain T echnopreneurship. For any organization, it is vital to have an efficient mode of communication that acts as an intraoffice tool.
It has a count of purposes. Clearly, it defines all activities as well as functions of an organization. The entire organization is regulated through the Memorandum of Association and a company is not liable to take action that crosses the boundary of MOA.
Thus, it is crystal clear from the above definition that the Memorandum of Association is a document that is established as the constitution of the company. It signifies the relationship of the company with that of the outer world.
It indicates the clear scope of all activities. MOA allows the shareholders, creditors as well as other people who are in relation with the company in any form to know the wide range of activities. As we have discussed above, MOA is too vital to any company and its establishment. No doubt, it is a must-have document for the setting up of an organization. It is not only a single document but means a lot for an organization and create limits within which they need to work in the future.
Here are some other significant aspects of the Memorandum of Association that we will have to aware of first. Let us take a peek at these below and try to let us know how important it is and how many ways.
Move further to know. It is the basic doc and the vital one that is needed for the establishment of any organization. No company gets registered with the MOA. It signifies all the operations as well as functions attached to the company. The document controls all the functionalities of an organization and that is why it is regarded as the charter of the company. Situation Clause - This clause gives the full address of the registered office of the company. Association and Subscription Clause - The memorandum needs to be subscribed by at least 7 members in the case of a Public limited company and at least 2 in the case of a private company The importance of the Memorandum of Association The MOA is a fundamental and vital document required for the registration of a company.
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Memorandum of Association MOA includes six different clauses as mentioned below:. The name of the company is its first unique identity. Thus the name clause of the memorandum consists of the authentic, legal and approved name of the company. Company names should not bear any similarities to a company registered with a similar name because many times these companies protect the name of their companies via a Trademark Registration procedure.
The domicile clause comprises all possible details of the registered office of the company. It has the name of the State or Union Territory of the registered office and may and may not have the exact address of the office. It also has the names of the registrars enrolled. Objects Clause constitutes the main body of the memorandum. It provides a list of all the operations of the company. Every motive and operation the company indulges in must be mentioned in the object clause.
Also, any such operation which is not mentioned in the object clause is considered to be beyond the reach of the company.
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