Understanding the Memorandum of Association (MoA) Under the Companies Act, 2013

 

Understanding the Memorandum of Association (MoA) Under the Companies Act, 2013

1. Introduction

• What a Memorandum of Association (MOA) is.

Memorandum of Association is a Legal Document/ Charter which describes the purpose for which the company is formed.

 Identified the possible scope of its operations out of Boundaries its action cannot go.

 It defines as well as confines the powers of the company. If anything is done out of these powers that will be ultra vires (beyond the powers) of the company and so void (means not acceptable if done anything which is not in power of Company)

• Importance of MOA in company formation.

A Company register under the Companies Act, 2013, the Document which provide the information regarding the Company, eg. Biodata of Company, which mandatory for formation of Company for the Objective of Company. It a document which attached with FORM of Incorporation of Company.

2. Definition & Purpose of MOA

• Definition under the Companies Act, 2013.

Under the Companies Act, Section 2 Clause (56) deals with the Definition of Memorandum of Association defines as Originally framed by Company OR altered from time to time as per law, under this Act, or any previous Act.

Originally framed by Company – Document prepared by the Company, says before incorporation the Subscriber of MOA, First Directors of Company and Member of Company, Actually while preparing they are not the Directors, member, subscriber Decide about what they did after incorporation, what will be the name of company, who will be the subscriber and location of company, How much Capital they needed etc. all these information will written in the MOA of Company.

Altered from time to time – Alteration means changes in MOA as required that time according to the law, like Change in name of Company, Change in Address of Company, Change in Capital of Company, basically the major changes, change in object of Company, liability of Company.

• Why is MOA essential? (acts as a company’s charter, defines the scope of activities, etc.

As per the Law, Section 4 (1) of Companies Act, talks about the Content of MOA

1.     Name Clause – What should be the Name of Company, which is reserved under FORM – RUN filed with ROC.

2.     Registered Clause – Where the registered office of Company will situated.

3.     Object Clause – What will do Company, what are the Operations, Business.

4.     Liability Clause – What will be the liability of Member, e.g. Limited by shares, Limited by Guarantee, Unlimited etc.

5.     Capital Clause – How Capital they required to start the Operation, How much Capital required.

6.     Subscription Clause – Who will be Subscriber of Company, ( Can’t Alter)

As per the Section 4 (6) of Companies Act, 2013  Format of MOA shall be in Table

1.     Table A - Companies limited by shares

2.     Table B - Companies limited by guarantee not having a share capital

3.     Table C - Companies limited by guarantee having a share capital

4.     Table D - Unlimited companies not having a share capital

5.     Table E - Unlimited companies having a share capital

As per the Section 6 of Companies Act, 2013, anything contained in MOA which is against the Companies Act, 2013 is VOID.

As per the Section 399 of Companies Act, 2013, defines after incorporation of Company, MOA becomes the Public Document

1.     Name Clause of MOA – The Name of Company shall not be Identical and Undesirable

Identical defines under Rule – 8(1)

Name Clause shall not be Identical with another, Difference on account of following.

1.     On basis of Private/Pvt/(P)

 

Ravi Private limited – Ravi Pvt Ltd – Ravi (P) ltd

 

2.     On basis of plural or singular form of words in one or both names

 

Ram singh limited – Rams Singhs limited – Rams Singh ltd

  

3.     On basis of Minor character change

 

Ram Singh Limited – Ram-singh Limtied – R-a-m S-i-n-g-h limited

 

4.     On basis of Different Tense

 

India Today limited – India tomorrow limited- India yesterday limited

 

5.     On basis of Phonetically similar

 

J K limited – Jay kay limited – Reliance limited Rilaance limted

 

6.     On Basis of English translation/ Hindi Translation

 

Kamal Limited – Lotus limited – lock limited- tala limited

 

Ghoda limited – Horse limited

 

7.     On basis of Word addition and deletion

 

Joginder Enterprises Limited-  Joginder pal Enterprises Limited

 

8.     On basis of Mis- spell

 

Puma limited- Poma limited- Raja limited – Raza limited

 

9.     On basis of Internet related word

 

Yes Bank Limited- Yes Bank.com limited – eg. .in, .com, etc.

 

10.  On basis of Different Combination

 

Joginder pal limited – Pal Joginder limited

  

 

Undesirable defines under Rule – 8(A)

            The Name of Company shall not be Undesirable.

1.     Name of Company shall not contain any Abusive word

2.     Name shall not be in section 3 of the Emblems and Names (Prevention and Improper Use) Act, 1950, unless a previous permission has been obtained under that Act.

3.     Name of the Company shall not be Offensive to any section of society.

4.     Name shall not reflect Wrong Object.

5.     Name shall not shows any Connection with Foreign Government

6.     Name shall not be identical with trade mark name and LLP name

7.     Name shall not contain the Word British India

 

Some specific name required the Approval of regulatory Authority.

1.     Insurance Company – IRDA

2.     Banking Company – RBI

3.     Stock Exchange Company – SEBI

4.     Mutual Fund Company – SEBI

5.     Venture Capital Company – SEBI

6.     Asset Management Company – SEBI

7.     Commodity Exchange Company – FMCG/SEBI

Some Specific name which mandatory to use in Name

If Business of Company- Finance, Lease, Chit fund, Investment.

Other Condition of Name

1.     If Company – Winding Up – then after 2 years of winding up

 

(Reason – if Dissolve after W-up then Company Can revive within 2 years)

 

2.     If Company – strike- off – then after 20 years of strike off

 

(Reason – Revival Period of S-off is 20 years)

 

3.     If Company – Dissolve then after 5 years

 

(Reason – Revival period is 5 years)

After all the matter of ROC is having own discretion.

As per the Section 4(3) of Companies Act, Central government approval required in some case if you use the following word in name of Company.

If name shows any kind of relation with the Indian Government.

As per the Rule -8(6) of Company Incorporation Rules, 2014- Use the Word

-        Board

-        Commission

-        Authority

-        Central

-        Union

-        President

-        Minister

Thank for reading

Check list of Statutory compliance under Labour Law

 Check list of Statutory compliance under Payment of Wages Act,  1936, Payment of Bonus Act, 1965, Provident Funds and Miscellaneous Provisions Act, Fund Provisions Act, 1952 , Payment of Gratuity Act, 1972, Industrial Disputes Act, 1947, Trade Unions Act, 1926, Minimum Wages Act, 1948, Employees’ Compensation Act, 1923, Factories Act 1948, Contract Labour (Regulation and Abolition) Act, 1970, The apprentice Act, 1961, The Air (prevention and control of pollution) Act, 1981, The Indian boiler Act, 1923, The Building and other construction workers (regulation of employment and condition of services) 1996, The Employee state insurance Act 1948, Environment (Prevention and Protection Act, 1986, The Equal Remuneration Act 1976, The Industrial Employment (Standing order) Act 1946, The Fatal Accidents Act 1947, The maternity Benefits Act, 1961, The Public Liability Insurance Act 1991, Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and The Water (Prevention and Control of Pollution) Act 1974.

S.no	NAME OF ACTS	CONTENT	FILLED OR NOT FILLED
1	Payment of Wages Act, 1936	Annual Certificate that the wages were paid in accordance with the Act.
		The number of employees in the establishment who are governed by the Act.
		Annual Return ((FORM- IV))
		No deduction from wages has been made other than those authorised under the Act.
		Wage Period
		Determination of Available and Allocable Surplus and correctness of Computation.
2	Payment of Bonus Act, 1965	Timely payment of the bonus.
		Eligible persons are paid bonus
		Whether the company paid minimum or maximum bonus.
		Annual return within 30 days of the expiry of 8 months from the closing of the accounting year in (FORM D)
		Timely deposit of Employer and Employee’s dues with Provident fund
3	Provident Funds and Miscellaneous Provisions Act, Fund Provisions Act, 1952 Commissioner/Trust.	Reporting of cases where proceedings under the Act have been initiated against the Directors for recovery of dues.
		If the Employer has created its own trust, whether the terms of the trust are more beneficial than those provided under the trust? Whether conditions imposed by PF Commissioner for the creation of Trust is satisfied
		The employer shall forward to the Commissioner, within twenty-five days of the close of the month, a monthly abstract in such form as the Commissioner may specify showing the aggregate amount of recoveries made from the wages of all the members and the aggregate amount contributed by the employer in respect of all such members for the month:
4	Payment of Gratuity Act, 1972	Whether liability for gratuity has been provided for in the Accounts or not?
		Whether the company has formed any trust that would take care of the liability arising out of gratuity.
		the number of claims during the year for the payment of gratuity and time taken for settlement.
		Whether the Gratuity has been paid in accordance with the provisions of the Act?
		Notice rejecting a claim for payment of gratuity to the concerned person (Form M )Rule 8(1)(ii)
		Notice of applicability of the Act & any changes to controlling authority (FORM -A or B)
		Whether any dispute exists against the company against the payment of gratuity? If so, details thereof.
		Certification that any industrial dispute arose during the year or not and manner of settlement of the same. Whether the dispute resulted in any closure of factory/strike/lockout and if so the period therefore
5	Industrial Disputes Act, 1947	Was there any reference of the dispute to Arbitration under section 10-A of the Act and results of such reference?
		Whether the industry has adopted any unfair labour practice.
		Name of the Protected workmen. Whether or not the industry is declared as Public Utility Services.
		Half-yearly return on Works Committee (to be submitted to concerned Conciliation Officer) Form G1 Rule 56A
		Number of Registered Trade unions in operation in the factory and its affiliations to any All India Organisations of Trade Unions.
6	Trade Unions Act, 1926	Returns Annually to the Registrar, on or before such date as may be prescribed, a general statement, audited in the prescribed manner, of all receipts and expenditure of every registered Trade Union during the year ending on the 31st December
7	Minimum Wages Act,1948	Whether the company is paying the wages in accordance with the provisions of the Act.
		Whether the employer is paying to overtime worker excess remuneration for this
		Register of Fines – Form I Rule 21(4)
		Annual Returns – Form III Rule 21 (4-A) to the concerned inspector
		Register for Overtime – Form IV Rule 25
		Register of Wages–Form X, Wages slip–Form XI, Muster Roll–Form V Rule 26
		Representation of register – for three year Rule 26-A
8	Employees’ Compensation Act, 1923	Fatal Accidents to be reported.
		Time is taken for payment for compensation. Disputes on the settlement of compensation to be reported.
		Any case of Occupational Disease reported in the factory or establishment.
		Serious bodily injuries /fatal accidents report within 7 days of the accident in (FORM EE)
		Insurance Cover for meeting the liability.
		Pending Disputes under the Act and its nature along with a note on liability accepted by the Employer.
		Whether the factory is registered or not? If so, the registration number of the factory be given.
9	Factories Act 1948	Annual Return to chief inspector in FORM -21( half-yearly) and FORM-22 (Annually)
		Item of manufacture.
		Whether a hazardous industry or not if so steps suggested by appropriate government for safety has been complied with in toto.
		Accidental/ dangerous occurrence then notice forthwith of occurrence to inspector/director of factories.
		Whether floor of workmen clean once in every week or not
		Whether the paint (other than washable ) once in 5 years or ( washable) once in 3 years and wash once in 6 months
		Surface painted once in 14 months
		Drinking water facility within 6 metres of any washing place or toilets.
		First aid availability if more than 150 worker
		The facility of canteen if more than 250 worker
		Timing for women (6 am – 7 pm)
		Whether Casing of new machinery or not
		Whether shelter rooms and lunch room available or not, if more than 150 worker
		Creches are available or not for women have child less than 6 months
		Whether working hours are in
		accordance with the provisions of the Act.
		Maintenance of proper records of
		Attendance and Leaves.
		Whether the welfare officer is appointed or not, if 500 < worker
		Whether the ambulance room is available or not, if more than 500 worker.
		Provisions relating to the employment of women, young persons etc. are duly complied with the act.
		Whether the urinals, latrine, spittoons cleaning once within 7 days
		Whether the factory/establishment is covered by the provisions (, where 20 or more worker are employed in any day preceding 12 months)
10	Contract Labour (Regulation and Abolition) Act, 1970	Whether the factory/establishment has duly submitted all returns to the Commissioner/Regional Commissioner as per the provisions of the Act, Rules and Regulations made in this behalf.
		Whether the establishment has duly applied for and obtained the certificate of registration before the employment of any contract labour.
		Whether all the contractors engaged by the establishment to supply workmen do possess valid licence.( valid for 12 months)
		Half-yearly return by the contractor to the concerned licencing officer in (FORM XXIV ).
		Annual Return in duplicate. Not later than 15 Feb following the end of each calendar year to Registering Authority having jurisdiction (FORM XXV)
		Whether canteen facility available for contract labour ( more than 100 or more)
		Whether restroom is available for the halt and stay or not
		Application for renewal of the licence in triplicate not less than 30 days before expiry to the concerned licencing officer (FORM-VII)
		Notice of commencement /completion of contract work by the Contractor within 15 days (FORM VI-A)
		Return of Notice within 15 days of commencement or completion of each contract by principle employer to the concerned inspector under the act (FORM VI-B)
11	The apprentice Act, 1961	Whether the apprentice is hired or not
		Whether the contract has signed with apprentice or not
		Form Apprenticeship 1 Rule 14: Half Yearly Returns
		Form Apprenticeship 3 Rule 14: Record of the progress of the apprentice
		Whether the maintained the register of attendance and register of no. of apprentice or not
		Whether the employer provide necessary infrastructure and instruction staff or not
		Form Apprenticeship 2 Rule 14: Return of engagement of apprentice
12	The Air ( prevention and control of pollution) Act, 1981	Whether the register under this act or not
		Whether the received guidance from the department if any
		Whether they comply of guidance or not
		Whether they comply with the act or not
13	The Indian boiler Act,1923	Form XVI-H Certificate of Approval as Well Known Material Testing 110
14	The Building and other construction workers ( regulation of employment and condition of services) 1996	Annual Return in duplicate. Not later than 15 Feb following the end of each calendar year to Registering Authority having jurisdiction (FORM XXV)
		Notice of accident within 4 hours in case of Fatal accident and 72 hours in case of others
		Intimation about the commencement of work within 30 days of the commencement of work to assessing officer in (FORM IV)
		Return about the levy of collection of Cess to Concerned Authority in ( FORM I)
		Notice of commencement /completion at least 30 days before (FORM IV) to the concerned inspector
15	The Employee state insurance Act 1948	Notice of commencement /completion at least 30 days before (FORM IV) to the concerned inspector
16	Environment ( Prevention and Protection Act ,1986	Whether the register under this act or not
		Whether the received guidance from the department if any
		Whether they comply with guidance or not
		Whether they comply with the act or not
17	The Equal Remuneration Act 1976	Whether the employer pays Equal remuneration to Male and Female workmen, who are indulged in the same working condition.
		Maintain Register in FORM-D up-to-date.
		Whether the employer prepares the document of standing order or not.
18	The Industrial Employment  (Standing order) Act 1946	Whether the standing certified by certifying officer.
		Whether the document of the standing order is as follows Modal standing order or not
		Whether the Standing order displayed on notice board or not ( in English as well as the local language)
19	The Fatal Accidents Act 1947
20	The maternity Benefits Act,1961	Whether any women worker has taken the maternity leave or not
		FORM 6 – Return of Contributions
		Annual return and details of payment ending 31st December in ( FORM L, M, N, O) to the competent authority under the act
		Whether the register is maintained of women, who took leave of maternity.
21	The Public Liability Insurance Act 1991	Every employer is required to constitute an Internal Complaints Committee at each office or branch with 10 or more employees. The District Officer is required to constitute a Local Complaints Committee at each district, and if required at the block level.
22	Sexual harassment of women at the Workplace (Prevention…
23	The Water (Prevention and Control of Pollution) Act 1974	i) Operation of the plant(s), product(s) being manufactured, the raw material being used with quantity,
		ii) Status of operation of Environment Management System comprising of generation and control measures taken for Water /Air /Solid Wastes/ Hazardous Wastes and their storage and disposal.
		iii) Maintenance of records in the form of logbooks etc. for pollution control devices, energy meter reading, raw consumption of water/fuel and other as deemed fit to the Inspection Team.
		iv) The number of outlets provided for disposal of waste water/liquid waste and compliance of thereof.
		v) The number of emission stacks/vents/boilers/ furnaces with their capacity etc. vi) Area within or outside the premises to check any unauthorized disposal or general housekeeping.
		vii) The compliance of the conditions of previously granted Consents / Authorizations under Environmental Laws. viii) Online Continuous Monitoring system details (if applicable)

Cs Joginder Pal-  joginderpal.cs@gmail.com