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Chapter:-2: Memorandum of Association & Articles of Association
Chapter:-2: Memorandum of Association & Articles of Association
Memorandum of Association
The first step is the formation of a company is to prepare memorandum of association. This is also known as constitution of the company.
Six Clauses
Name Objects Registered office
Liability
Capital
Association or subscription
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IV. The liability of the members is limited v. The authorized share capital of the company is RS.20,00,000,divided into 2,00,000
S.NO
Signature of subscriber
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Special Resolution. Written Approval of Central Government. No Approval of Central Government is necessary if the change of name involves only the addition or deletion of the word Private. Change by ordinary resolution and approval of Central Government when name is identical or too closely resembles the name of an existing company.
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From one premises to another premises in the same city, town or village By passing a resolution of Board of Directors
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From one town or city or village to another town or city or village in the same state 1. Special Resolution. 2. Confirmation of Regional Director when jurisdiction of Registrar of companies is changed. 3. Copy of (i) & (ii) to be filed with ROC. 4. Notice of new location to ROC within 30 days.
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From one state to another state 1. Special Resolution 2. Confirmation of Central Govt. 3. For certain Purposes only
(As given in section 17)
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The liability of a member of a company cannot be increased unless the member agrees in writing. From unlimited liability, it can be made limited by re-registration of the company.
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A company can reduce share capital by first passing a special resolution for reduction of capital .but powers to reduce share capital must be guaranteed in the articles of the company ,otherwise the share capital can be altered by special resolution giving such powers The company can apply to the court by petition for getting confirmation from the court for reducing the share capital . The main duty of the court is to look after the interest of the creditors and different classes of shareholders , and then decide whether the company should be allowed to reduce share capital .
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DOCTRINE OF ULTRA VIRES The words : Ultra means beyond Vires means the powers Ultra Vires means beyond the powers
A company which owes its incorporation to statutory authority cannot effectively do anything beyond the powers expressly or impliedly conferred upon it by the statute or Memorandum of Association.
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Articles Of Association
A document that specifies the regulations for a company's operations. The articles of association define the company's purpose and lays out how tasks are to be accomplished within the organization, including the process for appointing directors and how financial records will be handled.
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Items covered by the Articles of Association include : The important Powers, duties, rights and liabilities of Directors Powers, duties, rights and liabilities of members Rules for Meetings of the Company Dividends Borrowing powers of the company Calls on shares Transfer & transmission of shares Forfeiture of shares Voting powers of members
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No Article Company
A public limited company having share capital may be registered without Articles.
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Alteration of Articles
Articles may be altered by a company by passing special resolution at a general body meeting of shareholders
Articles of Association Regulations for internal management Rules for carrying out the objects of company. Subordinate to the memorandum. Company limited by shares need not have it (Table A applies) Can be altered by special resolution.
It define the relationship between company & its staff and between members & members interests