MEMORANDUM OF ASSOCIATION
“Under Section 2(56) of Companies Act, 2013 memorandum means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act”
In general language, the memorandum of association means the bye-laws or the constitution of the company in which all the basic details of a company is mentioned. For example; the name of the company, the place where the company is registered, the amount of authorized and paid-up capital, member’s liability, the business activity of the company, etc. The memorandum of association is a very important part of the company, no company can get registered without a memorandum of association. Generally, there are six different clauses in the memorandum of association but in One Person Company, there are seven clauses.
The name of the company shall contain “private limited” or “limited” or “OPC private limited” at the end of the name of the company.
Section 8 company is exempted from this rule which means they don’t need to write either private limited or limited at the end of their name.
The company can alter its name anytime during its tenure but before altering the name of the company, the company has to take prior consent from the members of the company in their general meeting.
Registered office Clause:
Every company shall have a registered office at the time of its registration as well as during its tenure. In the memorandum, the state shall be mentioned in which the company is registered and if the company shifts its office from one state to another then the changed or new state shall be mentioned in the memorandum.
This is the main important part of the memorandum of association of the company. It means that which kind of business company is going to do after its registration. The company can expand its business by adding another objective in its object clause or it can be completely changed as per the requirement. But the company cannot change its business activity without the prior consent of the shareholders of the company in their general meeting.
The company shall be either limited by shares or limited by the guarantee. If the company is limited by the guarantee then it shall contain the amount of guarantee taken by the members to contribute at the time of winding up of the company. If the company is limited by the shares the capital clause contains information regarding authorized capital and paid-up capital of the company. The paid-up capital of the company shall be equals to or less than the authorized capital.
The liability clause contains the type of liability the shareholders have means either they have limited liability or unlimited liability. Generally, all the company’s has limited liabilities.
This clause contains the information regarding the subscriber (members/shareholder) it contains the information regarding the shares taken by each shareholder at the time of its incorporation. The subscribers shall contain at least one share in the company.
This clause cannot be altered even if the existing shareholders sold their all shares to any other person.
This clause is only applicable to the One Person Company. Every OPC shall have a nominee and the detail of the nominee shall be mentioned in the memorandum of association of the company.
All the clauses of the memorandum of association can be altered any time during the life of the company except subscription clause but these alterations cannot be made without the prior approval of shareholders of the company and the company have to intimate regarding such alteration to the registrar of the companies.