Contents of the Memorandum of Association

The contents of the Memorandum of Association are detailed out below.

Purpose of Memorandum

●      Shareholders must know the field of business in which their money is going to be used and the risks involved in the investment.

●      Outside allies of the company must also know the objects of the company.

Printing and Signing of Memorandum

●      The memorandum of association should be divided into paragraphs and should be numbered consecutively before printing.

●      At least one witness should be present while a subscriber signs the association.

Form of Memorandum                 

●      The Memorandum of Association should be in the form B, C, D, or E tabular form in accordance with the Companies Act, 1956.

Contents of Memorandum

The following clauses should be included in the Memorandum of association of each and every company.

●      The word “limited” or the word “private limited” are required to be added as suffixes at the end of the name of a public company or a private company respectively.

●      The main objectives of the company.

●      The objectives auxiliary to the main objectives of the company.

Shares capital

In case of a company having its capital in shares,

●      Each subscriber shall take at least one share and shall write his name opposite to the number of shares he takes.

●      A company limited by guarantee should ensure that each member contributes a certain sum to the assets of the company.

Doctrine of Ultra Vires

●      A company can invoke all its powers as allowed by the Companies Act, 1956.

●      Everything else is Ultra Vires (“Ultra” means beyond and “Vires” means power).

●      A company acting Ultra Vires means it is acting illegal in the eyes of the law.

Ultra Vires by the Directors

●      If a transaction is made by a Director beyond the power of a Director but within the power of the company, the shareholders can rectify it in a general meeting.

●      Any irregularities can be cured by the consent of the shareholders, if the act is within the reach of the company.

Related Posts

© 2024 Business Management - Theme by WPEnjoy · Powered by WordPress