moa and aoa final
TRANSCRIPT
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Group 7
Shrish Agrawal 101
Poorva Bhirud 104
Sanket Gada 110 Jekin Rambhia 134
Maulik Shah 143
Aparna Vakil 157
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Memorandum of
Association
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Memorandum ofAssociation
MOA is a document which contains the rules
regarding constitution and activities or objects of the
company
It is the fundamental charter of the company
Its relations towards the members and outsiders are
determined by this document
The company is allowed to function within the frame
work of MOA, or else its act is construed as ultra vires
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Contents of MOA
I. Name of the company
II. Registered office of the company
III.Liability of the members
IV. Details of the share capital of the company
V. Objects of the company
VI. Subscription or association clause
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Name of the Company
A company can adopt any name if :
I. There is no other company registered under thesame or identical name
I. The name should not be considered undesirableand prohibited by Central Government
I. There is no company in existence which waspreviously registered under a similar name
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Case : Name Clause
Asiatic Government Security Life Insurance
Company
VS
New Asiatic Insurance Company
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Registered office of theCompany The company from the day it commences business
or within 30 days have a registered office
All communication and notices may be addressed tothe registered office
The company files a notice of registered office of thecompany with the Registrar of Companies
The company may alter its registered clause by
altering its registered office
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Capital Clause
The MOA shall also state the amount of sharecapital with which the company is to be registeredand division thereof into shares of a fixed amount
This capital is called the authorized or nominalshare capital
In case of companies limited by guarantee, theamount promised by each member to becontributed by them in case of the winding up ofthe company is to be mentioned
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Subscription clause
Each subscriber to the MoA takes 1 share.
Pvt co 2 persons; Public 7 persons
Subscription clause shall be in the following
form-
We the several persons whose namesand addresses are subscribed are
desirous of being formed into a company
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Liability Clause
The liability of the members is limited to the extentof the shares subscribed by the members if thecompany is formed with share capital or to theextent of the guarantee given by the members if the
company is formed with guarantee
The MOA of a company shall state that the liabilityof its members is limited
It means that no member can be called upon to payanything more than the nominal value of the shares
held by him.
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OBJECT CLAUSE
Defines the limits and extent of activities of thecompany.
MOA should state-
q Main object
q Object incidental or ancillary to the
attainment of main objectq Other object
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Importance of MoA to
shareholders and creditorsi. To be fully aware of the objects to
which their money can be employed
i. To protect the creditors by ensuringthat the companys funds are notdissipated in unauthorized activities.
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Alteration of MoA
Involves compliance with prescribedprocedure.
Alterations necessary for simple and fairworking of the company would bepermitted.
Should not be prejudicial to themembers and creditors of the company
and should not increase their liability.
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Change of name
Change can be effected by passing a specialresolution in a General Meeting and after
obtaining the approval of Central govt.
Application to be made to the RoC.
Reasons for change in name to bementioned.
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Change in registered office
Change from one place to another in thesame city- ordinary Board Resolution.
Change from one city to another city in thesame state Special Resolution andconfirmation by Regional Director
Change from one state to another state-Cannot be changed unless petition is filed
with and confirmed by the CLB for altering
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Reasons for change in office Enable company to carry on business more effectively of
efficiently
To attain its main purpose by new or improved means
To enlarge or change its local area of operation
To carry on some business which may be advantageouslycombined with the business of the company.
To restrict or abandon any of its object.
To sell or dispose of the whole or part of the undertakingof the company.
To amalgamate with any other company or body ofpersons.
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Alterations of the objects clauseSection 17 provides that a company may change its
objects only if alteration is necessary for any one of thefollowing purposes:
o To enable the company to carry on its business moreeconomically or more efficiently.
o To enable the company to attain its main purpose bynew or improved means.
o To enlarge or change the local area of the companys
operation.o To carry on some business which under existing
circumstances may conveniently or advantageouslybe combined with the business of the company.
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o To restrict or abandon any of the objects
specified in the memorandum.o To sell or dispose of the whole, or any part of the
undertaking of the company.
o To amalgamate with any other company or bodyof persons.
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o The alterations in the objects clause are to beconfined within the above limits otherwise the
alterations will be considered void.
o Company has to file with the registrar a specialresolution within one month from the date of
such resolution along with a printed copy of thealtered MoA.
o If the alteration is not registered within onemonth the will have no effect.
o The alterations should not be radical.
o E.g.:- in Bhutoria Bros Ltd.
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Alteration of capital clauseo Section 94 of the act provides that a limited
company having a share capital can alter itscapital clause.
o Alteration of share capital involves three things:
1. Increase of share capital: the company canincrease its capital as follows
. Increase its share capital by issuing new shares.
.
Consolidate and divide all or any of its sharecapital into shares of larger amount.
2. Reduction of share capital :
.
By sub-dividing shares or any of them intoshares of smaller amount.
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Cancel the shares and diminish the amountof its share capital by the amount of sharesso cancelled.
Cancellation of uncalled capital. Repayment of paid up capital which is in
excess of the needs of the company.
Extinguish the liability of any unpaid orpartly paid-up shares.
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3. Conversion of shares into stock: sum total of fullypaid up shares is stock.
The company recognizes the fact of completepayment of the shares.
Effect of conversion is that the holders of stockare to have same rights and privileges accordingto the amount of stock held by them.
Company has to notify the registrar about theconversion of shares within 30 days.
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Change in liability clause
The liability of the members cannot be altered soas to increase the liability of the members orprejudice their interests.
No member shall be bound by such an alteration.
The alteration can be effected only with theconsent of the members in writing either beforeor after a particular alteration is made.
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Articles of
Association
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Articles of Association (Sec 2)
Articles as originally framed or altered in timein pursuance of any previous companies lawor of this act including so far as they apply tothe company, the regulation contained inTable A to Schedule I.
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Form of contents of Articles
Regulations for internal management of thecompany.
1. Unlimited Company. No. of members with which company is to be
registered
. The amount of share capital.
2. Private Limited Company
. Right to transfer shares
. Limiting the members to 50
.
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Difference between MOA & AOA
Memorandum of Association Articles of Association
1. Charter determiningconstitution and activities
of company.
1. Regulations regardinginternal management of
the company.2. Fundamental charter. 2. Subsidiary to MOA
3. Every company musthave a Memorandum.
3. Not necessary for Publiccompany limited by shares.
4. Alteration ofMemorandum is strictlyregulated.
4. Can be altered by aresolution.
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Alteration Of AoA
Special Resolution
Approval from central Govt.
Printed copy of altered AoA shall be
filled with the ROC
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Alteration Of AoA Cases:
Madhav Ramchandra Kamath v/sCanara Banking Corporation Ltd
Shuttleworth v/s Cox Brothers and Co.
Greenhalgh v/s Ardence Cinemas Ltd.
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Doctrine of ultra vires
Beyond Power
Ashbury Railway Carriage and Iron co.Ltd v/s Riche
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Effects of Memorandum & Articles
(Sec. 36)
1. Members and Company2. Members inter-se3. Company and Outsiders
ects o emoran um
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ects o emoran umArticles
(Sec. 36)1. Members and Company Bind both to the same extent
Articles Contractual Obligation
Bonafide Alteration Valid
Articles Bind members to the
Company and vice versa
ects o emoran um
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ects o emoran umArticles
(Sec. 36)2. Members inter seArticles bind the member themselves
Comply with Rules & Regulations of theCo.
3. Company and OutsidersOutsiders Read the Articles (public
doc) of the Co.
Co. liable to the outsiders and vice-versa
f
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Constructive Notice of MoA& AoA Public documents
Open for inspection
Duty of person inspect before dealing
Its a notice to the public
i f d
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Doctrine of IndoorManagement
Aal IzzWell
Doobara matPuchna!
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Exceptions
Ultra vires acts
Knowledge of irregularity
Act outside apparent authority
Negligence
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Thank You !