The memorandum of association of a company being its charter, the right of the company to alter its contents is rigidly limited by the provisions of the act. The memorandum of association of a company states the company name and aims to out the main and subsidiary objectives of the company.
Contents of Memorandum of Association According to the Companies Act 1994, the Memorandum of Association must include the following Clauses:
(1) Name Clause
Every company name must end with Limited (Ltd.). No name of the company should be the name of the existing company, king, queen, president, a prime minister, Father of Nation or anything that signifies government sponsorship.
(2) Situation and Address Clause
This clause should include the address and situation of the company, which is mention in the registration.
(3) Area of Business
It should include the current and potential area of the business. It should be written carefully because it made the boundary around the business operations.
(4) Objective Clause
This clause is the most important clause of MA. This clause identifies the scope of the business. Beyond these identified scopes, the business can’t move. For example, if a company says its objective to do only Shoe business, it cannot do another business.
(5) Liability Clause
This clause tells about the duties and responsibilities of the Owners: i.e., whether the shareholders are liable for their share capital or promise.
(6) Capital Clause
This clause includes the amount of capital, its type, each share price, etc.
(7) Consent Clause
Here the directors declare in a written statement that they are agreeing to be the director of the proposed company by buying a certain amount of a share. Generally, the promoters become the directors. This statement should include a witness and the directors’ signature with their name, address, and occupation.