The memorandum of association of a company is an important corporate document in India. It is often simply referred to as the memorandum. In the India, it has to be filed with the Registrar of Companies during the process of incorporating a company.

It is the document that regulates the company’s external affairs, and complements the articles of association which cover the company’s internal constitution. It contains the fundamental conditions under which the company is allowed to operate. Until recently it had to include the “objects clause” which let the shareholders, creditors and those dealing with the company know what is its permitted range of operation, although this was usually drafted very broadly. It also shows the company’s Authorised capital. Read some important aspects of same.

Memorandum of Association (MOA) under Companies Act, 2013

1. What is Memorandum of Association (MOA)?

As per section 2 of the 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.

2. What are different parts of Memorandum of Association (MOA)?

As Memorandum of Association (MOA) is an important documents which outlines the company laws under which a company will work and function. It has several caluses which defines some pertinent aspects under provision of The Companies Act, 2013 which are as follows:-

1. Name Clause

2. Situation/ Registered State Clause

3. Object clause

4. Liability clause

5. Capital Clause

6. Subscriber Clause

Now lets us discuss them in detail.

i. Name Clause of Memorandum of Association

The name of the company should be stated in this clause. A company name should be which is not identical in any manner to any existing company also, there are some words which are strictly prohibited to be used in names of company in any manner. The Word “Private/PVT Limited” should be in end of any private company. And the word “Limited” should be in the end of every public limited Company.

An section 8 or not for profit company are not required to use the word “Private Limited/ pvt. Limited or Limited” at the end of their company name.

ii. Situation Clause of Memorandum of Association

In this clause the state name of company’s registered office is mentioned. The Company should intimate the location of registered office to the registrar within thirty days from the date of incorporation in case the permanent address of company is not given.

 It is one of important aspects as all the correspondence for cm=company will be sent on this. Note that just a few months also many companies have been strike off/ name has been removed due to non-maintenance of registered address of company able to receive and acknowledge the letters of company.

Once a company has been registered, it should have a proper registered office until, the company is closed.

iii. Objects Clause of Memorandum of Association

Every company have specific business which they will run after a company is incorporated. This clause states all the business which this proposed company will commence after incorporation that to in detail.

Now as per The Companies Act, 2013 only Main objects and other objects which are ancillary to main objects are covered.

Any business run apart from this can lead to closure of business. Again, there are some business which are required approval from different authorities like for loan and capital funding, Reserve Bank of India (RBI) is required. For commencing insurance business approval from Insurance Regulatory and development authority of India (IRDAI).

iv. Liability Clause of Memorandum of Association

This clause states the liability of the members of the company. The Liability can be limited or unlimited which means at the time of winding up of company, a company with limited liability, members are required to pay amount upto the value of nominal value of shares taken by them but in case of unlimited members are required to pay without any limit for the debt or payment which a company is required to pay.

v. Capital Clause of Memorandum of Association

This clause states the Authorised Capital of the company and total number of shares along with value of per share. This is the limit a company can raise its capital maximum amount. For example, if company authorised capital is 10 Lakhs and paid up at the time of incorporation is 1 Lakh, company can raise its capital upto 9 lakhs. But nothing more than 9 lakhs.

There is no limit for amount of authorised capital a company can have in India as per The Companies Act, 2013.

vi. Subscription Clause of Memorandum of Association

It contains the names and addresses of the first subscribers. The subscribers to the Memorandum must take at least one share. The minimum number of members is two (2) in case of a private company, seven (7) in case of a public company and one (1) in case of One Person Company as per The Companies Act, 2013.

The above clause are required to be inserted omission of any of above clause will lead to refusal of company incorporation by Registrar of Companies.

3. Can Memorandum of Association (MOA) be altered/changed?

Yes, as per section 13 of The Companies Act, 2013 Memorandum of Association (MOA) can be altered anytime but there are certain conditions which have to be complied before alteration.

4. What provisions/section governs the alteration/changes of Memorandum of Association (MOA)? 

Section 13 of The Companies Act, 2013 governs the process and conditions for alteration in Memorandum of Association (MOA). The following clauses can be changed as per this section-

1. Name Clause

2. Situation Clause

3. Object Clause

4. Capital Clause

However, they are also supported by other section to give effect to respective changes.

Note that Subscription clause can never be altered after the Company’s incorporation.

5. What are the forms to be filed for alteration/changes of Memorandum of Association (MOA)?

Different forms are filed to Registrar according the changed MOA clause and all have to be filled within the time prescribed under the required forms and sections.

6. What if company failed to comply the alter/change in Memorandum of Association (MOA) as per law?

As per section 13 of The Companies Act, 2013 until / unless all provisions and forms/ returns are not filled as per law, the alteration in Memorandum of Association stands nullified.

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Disclaimer: – The above article is prepared keeping in mind various provisions relating to Memorandum of association (MOA) under the Companies Act, 2013 and rules made thereunder. The author has tried to cover all the important and basic question relating to Memorandum of association (MOA) and alteration thereunder. Under no circumstance, the author shall not liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.

(The Author is Corporate Consultant and provides varied array of services including Start-ups mentor, Secretarial, Legal, Trademark, taxation, Audit, GST, Book keeping and other ancillary advisory service in Delhi, Chandigarh as well as The National Capital Region (NCR) and can be contacted through email id:- [email protected] and Contact Number: 91-8178515005).

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Qualification: CS
Company: Proventure- Aiding your Business
Location: NEW DELHI, New Delhi, IN
Member Since: 06 Jul 2019 | Total Posts: 64
I am Company Secretary and engaged with this profession from last nine (9) years. Throughout this journey, my moto is to help people start their startups and business. View Full Profile

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One Comment

  1. Adel says:

    If the Memorandum of association is in a language other than the official language of the state it should be translated to the language of the related state in order to be notarized.

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