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company_law:memorandum_of_association_2171112019

Memorandum Of Association

Definition of ‘Memorandum of Association’: In Section 2 (56) of the Companies Act, 2013, the definition of memorandum is given which is as follows:

“ Memorandum means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous companies laws or this Act.”

Form of Memorandum

The memorandum of association of a company shall be in such one of the forms in tables in Schedule I as may be applicable to the case of the company or in a form as near thereto as circumstances admit.

Printing and signature of memorandum

The memorandum shall -

  1. be printed
  2. be divided into paragraphs numbered consecutively and
  3. be signed by such subscriber (who shall add his address, description and occupation, if any), in the presence of at least one witness who shall attest the signature and shall likewise add his address, description and occupation, if any.

Memorandum contains the following clauses.

  1. The name clause.
  2. The registered office clause.
  3. The objects clause.
  4. The capital clause.
  5. The liability clause
  6. The association clause.

No company can be registered unless the Memorandum of Association is submitted to the Registrar. It is required to be prepared according to the provisions of the Companies Act. In the case of a public company, Memorandum must be signed by at least seven persons and if it is a private company, by two persons duly witnessed.

Alteration and Amendment of Memorandum

A company shall not alter the conditions in its memorandum except in the cases, in the mode, and to the extent for which express provision is made in this Act.

Change of Object Clause

  1. A company may by special resolution alter the provisions of its memorandum so as to change the place of its registered office from one state to another or with respect to the objects of the company so far as may be required to enable it -
    1. to carry on its business more economically or more efficiently.
    2. to attain its main purpose by new or improved means.
    3. to enlarge or change the local area of its operations.
    4. To carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company.
    5. To restrict or abandon any of the objects specified in the memorandum.
    6. To sell or dispose of the whole or any part of the undertaking or of any of the undertakings of the company or
    7. To amalgamate with any other company or body of persons.
  2. The alteration of the provisions of memorandum relating to the relating to the change of the place of its registered office from one State to another shall not take effect unless it is confirmed by the Company Law Board on petition.

Change of Registered office

  1. No company shall change the place of its registered office from one place to another within a State unless such change is confirmed by the Regional Director.
  2. The company shall make an application in the prescribed form to the Regional Director for confirmation .
  3. The confirmation referred to shall be communicated to the company within four weeks from the date of receipt of application for such change.
    Explanation: For the purpose of this section, it is hereby declared that the provisions of this section shall apply only to the companies which change the registered office from the jurisdiction of one Registrar of Companies to the jurisdiction of another Registrar of Companies within the same state
  4. The company shall file, with the Registrar a certified copy of the confirmation by the Regional Director for change of its registered office under this section ,within two months from the date of confirmation, together with a printed copy of the memorandum as altered and the Registrar shall register the same and certify the registration under his hand within one month from the date of filing of such document.
  5. The certificate shall be conclusive evidence that all the requirements of this Act with respect to the alteration and Confirmation have been complied with and henceforth the memorandum as altered shall be memorandum of the company.

Alteration to be registered within three months

  1. A company shall file with the Registrar-
    1. a special resolution passed by a company in relation to clauses (a) to (g) of subsection (1) of section 17, within one month from the date of such resolution, or
    2. a certified copy of the order of the Company Law Board made under sub-section (5) of that section confirming the alteration, within three months from the date of order, as the case may be, together with a period copy of the memorandum as altered and the Registrar shall register the same and certify the registration under this hand within one month from the date of filling of such documents.
  2. The certificate shall be conclusive evidence that all the requirements of this Act with respect to the alteration and the confirmation thereof have been complied with, and henceforth the memorandum as so altered shall be the memorandum of the company.
  3. Where the alteration involves a transfer of the registered office from one State to another, a certified copy of the order confirming the alteration shall be held by the company with the register the same, and shall certify under his hand the registration thereof, and the Registrar of the state from which such office is transferred shall send to the Registrar of the other State all documents relating to the company registered, recorded or filed in his office.

Change of Name

A company may, by special resolution and with the approval of the Central Government signified in writing, change its name. It is also provided that so such approval shall be required where the only change in the name of a company is the addition thereto or, as the case may be, the deletion there from, of the work “Private”, consequent on the conversion in accordance with the provisions of this Act of a public company into a private company or a private company into a public company. Registration of Change of name and effect thereof: Where a company changes its name in pursuance of section 21 or 22, the Registrar shall enter the new name on the register in the place of the former name, and shall issue a fresh certificate of incorporation with the necessary alterations embodied therein; and the change of name shall be complete and effective only on the issue of such a certificate.

DOCTRINE OF ULTRA VIRES

An action outside the memorandum is ultravires the company.

The act of company is not ultra vires if it is found:

This doctrine prevents the wrongful application of the company’s assets likely to result in the insolvency of the company and thereby protects creditors. Besides the doctrine of ultra vires prevents directors from departing the object for which the company has been formed and, thus, puts a check over the activities of the directions. It enables the directors to know within what lines of business they are authorized to act.

  1. The Doctrine of “ ultra vires” has been well established in the case of Ashbury Railway carriage & Iron Co. Ltd V. Riche(1875)LR 7 HL 653
  2. By such representation the directors must have induced the third party to make a contract with the company in respect of a matter beyond the memorandum or powers of the company.
  3. The third party must have acted on such inducement and suffered some loss.


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Created on 2020/10/19 23:13 by • Last modified on 2021/02/02 07:14 by LawPage