Memorandum And Its Clauses
The Memorandum of Association is the main document of a company. It defines its constitution and objects. It lays down the fundamental conditions upon which alone the company’s allowed to be formed.
The Memorandum of Association most be divided into paragraphs, numbered consecutively and printed. It must be signed y the seven persons who have agreed to form the company in the presence of at least one attesting witness.
Memorandum of Association contains the following clauses:
Name Clause: In this clause, the name of the company is stated. The name should not be identical or similar to the name of an existing company. It should not conversant connection or link with a government department or local authority. It shod not be objectionable in any other manner. The name of a private company should en with h world ‘Private Limited’ and that of a public company with the world ‘limited’.
Situation Clause: This clause states: (a) the main objects of the company and the objects incidental or ancillary to the attainment of the minuets; and 9b) other objects of the company. The objects of the company must into be contrary to the provisions of any law. They should not be immoral, opposed to public policy or fraudulent.
Liability Clause: In this clause, the liability of members is stated. It indicates t outsiders the extent to which they can hold the members liable for the company’s debts.
Capital Clause: This clause specifies the amount of shrew capital with which the company is to e registered. It also states the division of share capital into shares of fixed denomination. The capital with which a company’s registered is clad Authorized or Registered or Nominal Capital. Accompany can issue only that number of shares which’s authorized by its memorandum of association.
Association or Subscription Clause: In this clause, the subscribes to tee memorandum decor that they are desirous of forming themselves into a company. Each subscriber signs the memorandum in the presence of withes. They also agree to take the number of share mentioned against their names. Each subscriber to the memorandum has to take at least one share.