MoA and AoA Final

8/2/2019 MoA and AoA Final

1/38

4/17/12

Group 7

Shrish Agrawal 101

Poorva Bhirud 104

Sanket Gada 110 Jekin Rambhia 134

Maulik Shah 143

Aparna Vakil 157


2/38

Click to edit Master subtitle style

4/17/12

Memorandum of

Association


3/38

4/17/12

Memorandum ofAssociation

MOA is a document which contains the rules

regarding constitution and activities or objects of the

company

It is the fundamental charter of the company

Its relations towards the members and outsiders are

determined by this document

The company is allowed to function within the frame

work of MOA, or else its act is construed as ultra vires


4/38

4/17/12

Contents of MOA

I. Name of the company

II. Registered office of the company

III.Liability of the members

IV. Details of the share capital of the company

V. Objects of the company

VI. Subscription or association clause


5/38

4/17/12

Name of the Company

A company can adopt any name if :

I. There is no other company registered under thesame or identical name

I. The name should not be considered undesirableand prohibited by Central Government

I. There is no company in existence which waspreviously registered under a similar name


6/38

4/17/12

Case : Name Clause

Asiatic Government Security Life Insurance

Company

VS

New Asiatic Insurance Company


7/384/17/12

Registered office of theCompany The company from the day it commences business

or within 30 days have a registered office

All communication and notices may be addressed tothe registered office

The company files a notice of registered office of thecompany with the Registrar of Companies

The company may alter its registered clause by

altering its registered office


8/384/17/12

Capital Clause

The MOA shall also state the amount of sharecapital with which the company is to be registeredand division thereof into shares of a fixed amount

This capital is called the authorized or nominalshare capital

In case of companies limited by guarantee, theamount promised by each member to becontributed by them in case of the winding up ofthe company is to be mentioned


9/384/17/12

Subscription clause

Each subscriber to the MoA takes 1 share.

Pvt co 2 persons; Public 7 persons

Subscription clause shall be in the following

form-

We the several persons whose namesand addresses are subscribed are

desirous of being formed into a company


10/384/17/12

Liability Clause

The liability of the members is limited to the extentof the shares subscribed by the members if thecompany is formed with share capital or to theextent of the guarantee given by the members if the

company is formed with guarantee

The MOA of a company shall state that the liabilityof its members is limited

It means that no member can be called upon to payanything more than the nominal value of the shares

held by him.


11/38

4/17/12

OBJECT CLAUSE

Defines the limits and extent of activities of thecompany.

MOA should state-

q Main object

q Object incidental or ancillary to the

attainment of main objectq Other object


12/38

4/17/12

Importance of MoA to

shareholders and creditorsi. To be fully aware of the objects to

which their money can be employed

i. To protect the creditors by ensuringthat the companys funds are notdissipated in unauthorized activities.


13/38

4/17/12

Alteration of MoA

Involves compliance with prescribedprocedure.

Alterations necessary for simple and fairworking of the company would bepermitted.

Should not be prejudicial to themembers and creditors of the company

and should not increase their liability.


14/38

4/17/12

Change of name

Change can be effected by passing a specialresolution in a General Meeting and after

obtaining the approval of Central govt.

Application to be made to the RoC.

Reasons for change in name to bementioned.


15/38

4/17/12

Change in registered office

Change from one place to another in thesame city- ordinary Board Resolution.

Change from one city to another city in thesame state Special Resolution andconfirmation by Regional Director

Change from one state to another state-Cannot be changed unless petition is filed

with and confirmed by the CLB for altering


16/38

4/17/12

Reasons for change in office Enable company to carry on business more effectively of

efficiently

To attain its main purpose by new or improved means

To enlarge or change its local area of operation

To carry on some business which may be advantageouslycombined with the business of the company.

To restrict or abandon any of its object.

To sell or dispose of the whole or part of the undertakingof the company.

To amalgamate with any other company or body ofpersons.


17/38

4/17/12

Alterations of the objects clauseSection 17 provides that a company may change its

objects only if alteration is necessary for any one of thefollowing purposes:

o To enable the company to carry on its business moreeconomically or more efficiently.

o To enable the company to attain its main purpose bynew or improved means.

o To enlarge or change the local area of the companys

operation.o To carry on some business which under existing

circumstances may conveniently or advantageouslybe combined with the business of the company.


18/38

4/17/12

o To restrict or abandon any of the objects

specified in the memorandum.o To sell or dispose of the whole, or any part of the

undertaking of the company.

o To amalgamate with any other company or bodyof persons.


19/38

4/17/12

o The alterations in the objects clause are to beconfined within the above limits otherwise the

alterations will be considered void.

o Company has to file with the registrar a specialresolution within one month from the date of

such resolution along with a printed copy of thealtered MoA.

o If the alteration is not registered within onemonth the will have no effect.

o The alterations should not be radical.

o E.g.:- in Bhutoria Bros Ltd.


20/38

4/17/12

Alteration of capital clauseo Section 94 of the act provides that a limited

company having a share capital can alter itscapital clause.

o Alteration of share capital involves three things:

1. Increase of share capital: the company canincrease its capital as follows

. Increase its share capital by issuing new shares.

.

Consolidate and divide all or any of its sharecapital into shares of larger amount.

2. Reduction of share capital :

.

By sub-dividing shares or any of them intoshares of smaller amount.


21/38

4/17/12

Cancel the shares and diminish the amountof its share capital by the amount of sharesso cancelled.

Cancellation of uncalled capital. Repayment of paid up capital which is in

excess of the needs of the company.

Extinguish the liability of any unpaid orpartly paid-up shares.


22/38


23/38

4/17/12

3. Conversion of shares into stock: sum total of fullypaid up shares is stock.

The company recognizes the fact of completepayment of the shares.

Effect of conversion is that the holders of stockare to have same rights and privileges accordingto the amount of stock held by them.

Company has to notify the registrar about theconversion of shares within 30 days.


24/38

4/17/12

Change in liability clause

The liability of the members cannot be altered soas to increase the liability of the members orprejudice their interests.

No member shall be bound by such an alteration.

The alteration can be effected only with theconsent of the members in writing either beforeor after a particular alteration is made.


25/38

Click to edit Master subtitle style

4/17/12

Articles of

Association


26/38

4/17/12

Articles of Association (Sec 2)

Articles as originally framed or altered in timein pursuance of any previous companies lawor of this act including so far as they apply tothe company, the regulation contained inTable A to Schedule I.


27/38

4/17/12

Form of contents of Articles

Regulations for internal management of thecompany.

1. Unlimited Company. No. of members with which company is to be

registered

. The amount of share capital.

2. Private Limited Company

. Right to transfer shares

. Limiting the members to 50

.


28/38

4/17/12

Difference between MOA & AOA

Memorandum of Association Articles of Association

1. Charter determiningconstitution and activities

of company.

1. Regulations regardinginternal management of

the company.2. Fundamental charter. 2. Subsidiary to MOA

3. Every company musthave a Memorandum.

3. Not necessary for Publiccompany limited by shares.

4. Alteration ofMemorandum is strictlyregulated.

4. Can be altered by aresolution.


29/38

4/17/12

Alteration Of AoA

Special Resolution

Approval from central Govt.

Printed copy of altered AoA shall be

filled with the ROC


30/38

4/17/12

Alteration Of AoA Cases:

Madhav Ramchandra Kamath v/sCanara Banking Corporation Ltd

Shuttleworth v/s Cox Brothers and Co.

Greenhalgh v/s Ardence Cinemas Ltd.


31/38

4/17/12

Doctrine of ultra vires

Beyond Power

Ashbury Railway Carriage and Iron co.Ltd v/s Riche


32/38

4/17/12

Effects of Memorandum & Articles

(Sec. 36)

1. Members and Company2. Members inter-se3. Company and Outsiders

ects o emoran um


33/38

4/17/12

ects o emoran umArticles

(Sec. 36)1. Members and Company Bind both to the same extent

Articles Contractual Obligation

Bonafide Alteration Valid

Articles Bind members to the

Company and vice versa

ects o emoran um


34/38

4/17/12

ects o emoran umArticles

(Sec. 36)2. Members inter seArticles bind the member themselves

Comply with Rules & Regulations of theCo.

3. Company and OutsidersOutsiders Read the Articles (public

doc) of the Co.

Co. liable to the outsiders and vice-versa

f


35/38

4/17/12

Constructive Notice of MoA& AoA Public documents

Open for inspection

Duty of person inspect before dealing

Its a notice to the public

i f d


36/38

4/17/12

Doctrine of IndoorManagement

Aal IzzWell

Doobara matPuchna!


37/38

4/17/12

Exceptions

Ultra vires acts

Knowledge of irregularity

Act outside apparent authority

Negligence


38/38

/ /

Thank You !

Documents

MoA and AoA Final