This sub-clause has to state the main objects to be pursued by the company on its incorporation and objects incidental or ancillary to the attainment of the main objects. Articles of Association is a document containing all the rules and regulations that governs the company. Want to share a story? Secondly, it is the place where various registers relating to the company must be kept and to which all communications and notices must be sent. Each subscriber must take at least one share. To adopt such means of making known the products of the company as may seem expedient and in particular by advertising in press, cinema, electronic media such as television, internet etc. A transaction which cannot reasonably be regarded as arising from the main objects of the company will not become valid and binding upon the company only because it is for the benefit of the company.
They also help in the proper management and functioning of the company throughout its life. This amount is called the company's authorized capital. However, certain restrictions have been imposed on its choice of name. The Memorandum of Association has the following Clauses: Name clause: It contains the name of the company Situation clause: It contains the location of the registered office. It also contains the powers of the company within which it can act. It secures to the company de facto monopoly of corporate trading under a particular name.
Existing companies may take advantage of this change by passing a special resolution to remove their objects clause. They must also sign articles of association of the company. A minor or a partnership firm cannot be a subscriber to the Memorandum. It is not necessary for a company limited by guarantee to have a share capital but if it chooses to have a share capital, its memorandum is also required to contain the capital clause. In the case of companies with object not confined to one state, the states to whose territories the objects extend. All the records of the company shall be transferred to the Registrar of the State in which the registered office of the company is transferred. Liability of Shareholders The liability clause requires you to state the extent to which shareholders of the company are liable to the debt obligations of the company in the event of the company dissolving.
For example, forming a company for dealing in lotteries or for trading with the alien enemies. Objects clause: The objects clause is the most important clause in the memorandum of association of a company. They need not be independent or unconnected. To engage, employ, suspend and dismiss executives, engineers, agents, manager, superintendents, assistants, clerks, coolies and other servants and laborers and to remunerate any such person at such rate as shall be thought fit, to grant bonus, compensation, pension or gratuity to any such person or to his widow or children and generally to provide for the welfare of all the employees. On the contrary, articles of association govern the relationship between the company and its members and also between the members themselves. UpCounsel is an interactive online service that makes it faster and easier for businesses to find and hire legal help solely based on their preferences.
Knowing the difference between these two terminologies is important when you are planning to register a company. To insure with any other company, firm or persons against losses, damages and risks of all kinds that may affect the company. The articles can be drafted as per the choice of the company. The company shall not be allowed to continue in existence merely because the secondary objects are still possible, unless the Memorandum provides that the several objects are to be constructed as independent objects. To establish, provide, maintain and conduct or otherwise subsidize research laboratories and experimental workshops, for scientific and technical research and experiments, to undertake and carry on scientific and technical researches, experiments and tests of all kinds, to promote studies and researches, both scientific and technical, investigations and inventions by providing, subsidizing, endowing or assisting laboratories, workshops, libraries, lectures, meetings and conference and by providing or contributing to the award of scholarships, prizes and reward, studies, researches, investigations, experiments, tests and invention of any kind that may be considered likely to assist any business which the company is authorized to carry on. Where a company changes its name, the Registrar shall enter the new name in the Register in the place of the old name and issue a fresh certificate of incorporation with the necessary alterations embodied therein to the company. You must conduct the signing in the presence of witness who must also append his signature.
Contents of the memorandum of association By S. It will fix up the domicile of the company. Alteration of matters other than conditions in the memorandum may be effected in the same manner as the alternation of articles, or in any other manner provided by the Act. Alteration of Memorandum by Change of name An application shall be filed in Form No. General meaning of Article of Association The Articles of Association is a document that contains the purpose of the company as well as the duties and responsibilities of its members defined and recorded clearly. The user of the information agrees that the information is not a professional advice and is subject to change without notice.
Today it is a Public company unlisted. Capital clause: Capital Clause has the details of the share capital of the company. Prior to the Act of 1965 a company was supposed to be governed in the light of Main Objects rule in India. Change of Name — A company may, by passing a special resolution and with the approval of the Central Government signified in writing, change its name as per S. Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. It contains the fundamental conditions upon which alone the company is allowed to be incorporated.
Different clauses: A brief discussion of the various clauses are as follows: Name clause: A company may be registered with any name it likes. Firstly, it ascertains the domicile and nationality of a company. The state in which the registered office of the company is to be situated. Memorandum of Association of a company limited by shares. But in the case of a company to be registered after the amendment, the objects clause must state separately: a Main objects. The subscribers of the memorandum may choose any object for the company subject to the only restriction that the object should not infringe or should not be against the general law and the provisions of the Indian Companies Act. It contains the rights, privileges and powers of the company.
When the first limited companies were incorporated, the objects clause had to be widely drafted so as not to restrict the board of directors in their day to day trading. The objects of the company to be classified as:a. In case of change of registered office from one State to another State, a special resolution is required to be passed at the general meeting of the shareholders and a copy of it is to be filed with the Registrar within thirty days. The main objects of the company to be pursued by the company on its incorporation and objects incidental to the attainments of the main objects, and b. Memorandum of Association defines the relationship of a company with the outsiders. The state in which the registered office of the company is to be situated. The actual address of the registered office is not required to be stated in the Memorandum of Association of the Company.