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MemorandumMemorandum

&&

Articles Of AssociationArticles Of Association

Submitted To:-

Dr. Rajendra Mishra

8/9/2019 MOA & AOA1


³Contents´

Memorandum of Association Memorandum Clauses.

Alteration of Memorandum.

Doctrines of Ultra Vires.

Articles of Association Definition

Contents of Articles.

Alteration Of Articles.

Difference Between MOA & AOA.

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³Memorandum

Of Association´

Submitted By:-Harsh Udesh Bhat

MBA,Ist SEM

Roll No. 9

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³Memorandum Of Association´

Why Memorandum?

Share Holders.

Creditors.

Definition [Sec. 2(28)]

³Memorandum means Memorandum of

Association of a Company as originallyframed or as altered from time to time inpursuance of any previous Company lawor of the Companies Act of 1956.´

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³Memorandum Clauses´

Name clause

R egistered Office clause

Object

Clause

Liability Clause

AssociationClause

MOA

CapitalClause

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³Name Clause´ [Sec. 13(1)(a)]

Undesirable name to be avoided.

Injunction if identical name adopted. Limited or Private limited as the last

words of the name.

Prohibition of using certain namesand symbols.

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³Registered Office Clause´ [Sec 3(1)(b)]

Every company should have it¶s Fixed

Office. Notice of the situation of the Office

within 30 days of incorporation.

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³Object Clause´ [13(1)(c)(d)]

Object both defines and confines the

powers of Company. Useful for both Share holders and

Creditors.

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³The Capital Clause´[Sec 13(4)(a)]

Fixed share capital with which the

Company is to be installed. Fixed capital with which it is

registered is called ³RegisteredCapital´.

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³The Liability Clause´ [Sec. 13(2)]

Company limited by Shares or by

Guarantee shall also state the liabilityof its members.

If the number of members falls belowthe statutory minimum, then the

members who are a part of thecompany are responsible for thedebts.

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³The Association Clause´ [13(4)(c)]

We the persons whose names and

addresses are incorporated in theMemorandum, agree to take thenumber of Shares in the Capital.

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³Alteration Of Memorandum Of Association´

Change Of Name.

Change of Registered Office. Alteration of Objects.

Change in Liability Clause.

Change in capital.

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³Doctrine of Ultra Vires´

Ultra = ³Beyond´ & Vires = ³Power´.

Ultra Vires the Company.

Ultra Vires the Directors.

Ultra Vires the Articles.

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Doctrine of Ultra Vires

Any activity done contrary to or in excess of the

scope of activity of the Companies Act, MoA,

AOA will be Ultra Vires. The Doctrine of Ultra Vires has been affirmed

by The Supreme court in lakshmana Swami

Mudalair VS Life Insurance Corporation Of India.

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In this case, the Directors were authorized, ³To

make payments towards any charitable or for

any general public or useful Object.´

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Effects Of Ultra Vires Transctions

Act Null and Void.

Company cannot sue or be used.

Injuction.

Personal Liability of Directors.

Ultra Vires borrowings.

Ultra Vires Contracts.

Ultra Vires Trots.

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Constructive Notice Of MOA and

AOA. Every person who deals with the Company, is

presumed to have read the MOA & AOA of the

company and is deemed to know the contents of these documents.

Therefore, the knowledge of these documents &

their contents is known as the constructivenotice of AOA & MOA.

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It is presumed that persons dealing with the

company have not only read these documents

but have also understood their proper meaning.(Oak Bank Oil Co. vs Crum.)

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Doctrine of Indoor Managemnt

The outsiders dealing with the company are

entitled to assume that as far as the internal

Proceedings of the company are concerned, everything has been regularly done.

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Royal British Bank VS Turquand

Premier Industrial Bank Limited. VS Carlton

Mfg. Co. Ltd.

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³Articles Of Association´

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³Articles of Association[sec.2(2)]´

Definition:-

³The Articles of Association of a companyas originally framed or as altered fromtime to time in pursuance of this Act,including so far as they apply to the

Company, the regulations contained inTable A in Schedule I annexed to thisAct´

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³Properties of AOA´

Next important to Memorandum of

Association´

Must not violate the Memorandumand the Act .

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³Content of Articles´ Share Capital &Variation

of rights.

Lien of Company onShares.

Calls on shares

Share Certificate

Transfer of Shares

Transmission

Forfeiture of Shares Conversion of Shares

with Stocks

Share warrants

Alteration of ShareCapital

General Meeting

Proceedings at generalmeetings.

Notes by members. Board of Directors and

their Powers.

Capitalization.

Winding Up.

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³Application of AOA´ Unlimited Companies.

Companies limited by Guarantee.

Having share Capital. Do not have Share Capital.

Private Company.

Restricting number of members.

Right to transfer of Shares

Prohibition of any Public involvement.

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³Alteration Of Articles´ Must not be inconsistent with the Act.

Must not Conflict with Memorandum

Must not sanction anything illegal. Must be benefit for the company.

Must not increase Liability of Members.

Alteration by Special resolution.

Approval of Government when PublicCompany is converted into Privatecompany.

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³MOA´ ³AOA´ It is the Charter of the

company indicating thenature of its Business.

It defines the Scope of theActivities of the Company.

It being the Charter of theCompany is the ³SupremeDocument´

Every Company Must haveits own Memorandum.

There are strict Restrictions

on its alteration. Ultra wires the

Memorandum is whollyvoid.

They are regulations for theinternal management of theCompany.

They are the rules forcarrying out the Objects of

the company. They are Subordinate to the

Memorandum.

A company limited byshares need not haveArticles of its own. Table A

Can be altered by Specialresolution.

Ultra Vires the Articles canbe confirmed.

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