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