The Memorandum of Association (MOA) is the cornerstone of a company’s foundation during its incorporation. It acts as the company’s constitution, delineating the scope of powers and rights within which the company operates. In the event of a conflict between the Companies Act and the MOA’s clauses, legal provisions take precedence.
The MOA includes the object clause, which specifies the company’s objectives and limits its activities to these purposes. Any action beyond this clause is considered ultra vires (beyond the powers) and thus void. The MOA also serves as a public document when the company engages with third parties, ensuring transparency and legal adherence.
The MOA must be prepared according to the format prescribed in Table A-F of Schedule I of the Companies Act 2013, with different tables applicable based on the company’s type and status.
| Table A | Table B | Table C | Table D | Table E |
| MOA of Companies Limited By Shares. | MOA of the Companies Limited by Guarantee and Have no Shares Capital. | MOA of Companies limited by guarantee but have share capital. | MOA of the Unlimited Companies. | MOA of the Unlimited Companies and share capital. |
Contents of the Memorandum of Association (MOA)
- Name Clause
- Specifies the company’s name, which must be unique and include “Private Limited” or “Limited,” depending on the company’s type.
- Registered Office Clause
- Details the address of the company’s registered office, which must be within the jurisdiction of the Registrar of Companies.
- Object Clause
- Defines the primary objectives for which the company is established and any ancillary activities. It outlines what the company can and cannot do.
- Liability Clause
- States the extent of liability of the members, which can be limited by shares or guarantee.
- Capital Clause
- Specifies the company’s authorized capital and the division of this capital into shares of a fixed amount, if applicable.
- Association Clause
- Contains the declaration by the initial subscribers to the MOA, expressing their intention to form the company and agreeing to take shares.
- Subscription Clause
- Lists the names, addresses, and signatures of the initial subscribers to the company’s shares, and the number of shares they agree to take.
- Alteration Clause
- Describes the procedure for making changes to the MOA, including any amendments to the objects or capital.
What is Clause in Memorandum of Association of Company
- Main Activity: The primary business activities the company is set up to undertake.
- Ancillary Activities: Additional activities that support or complement the main business operations.
Process to Amend the Object Clause of a Company’s MOA
- Board Meeting Resolution
- Convene a board meeting to propose the amendment and draft the necessary resolution. The board must approve the changes to the Object Clause before proceeding.
- Special Resolution
- Pass a special resolution in the General Meeting of the shareholders. This requires a 75% majority vote to approve the amendment to the Object Clause.
- Filing with Registrar
- Submit the amended MOA along with the special resolution to the Registrar of Companies (ROC) through the prescribed e-forms. Ensure all necessary documents are attached and correctly filled.
- ROC Approval
- The ROC reviews the submission. If the documents are in order and comply with legal requirements, the amendment will be approved and updated in the company records.
- Public Notification
- Once approved, notify the change in the Object Clause through the company’s official website or other prescribed methods, ensuring transparency and compliance.
Conclusion
The Memorandum of Association (MOA) is the cornerstone of a company’s legal foundation, defining its name, objectives, and scope of operations. It serves as the company’s constitution, guiding its activities and ensuring regulatory compliance. A well-crafted MOA not only establishes a clear operational framework but also safeguards the company’s interests by delineating its business boundaries. In essence, the MOA is crucial for setting up a transparent, legally sound, and effective business structure.