Overview

The Memorandum of Association (MOA) of any company is the foundation of any company that is being incorporated. The MOA is the constitution of the company as well as it defines the scope of powers and rights within which a company operates. In the memorandum, the provisions of law apply if there is any conflict between the Companies Act and Claus.

The

object is part of the memorandum that defines the objectives of the company for which it is being created. The company cannot proceed beyond its object clause. In any scenario, no company can take action against the provisions of its memorandum, and if it does, such a transaction will be ultra vires and therefore void. If the company enters into a contract, any arrangement or a contract with a third party, such memorandum is used as a public document.

The

Memorandum of Association should be given in the table of Schedule I of the Companies Act 2013 as per Format I. The following table is used for different types of companies such as depending on its position:

• Table A

  MOA of companies limited by shares.

• Table B

  Companies limited by guarantee have no MOA and no share capital.

• Table C

  The companies have MOA but share capital limited by guarantee.

• Table D

  MOA of unlimited companies.

• Table E

  MOA and share capital of unlimited companies

Content of MOA

The company's MOA consists of the following sections:

• Name block

  This is the first clause in every MOA that will refer to the name of the company as Private Limited, Limited, OPC Private Limited, depending on the type of company. Such a requirement should not be met by the Section 8 company.

• Registered Address Block

  This is the section that states the name of the state where the company's registered office is located.

• Object clause

  This specifies the items for which the company is included.

• Liability clause

  This specifies the limited or unlimited liability of the members.

• Capital clause

  This is the last clause in which the capital of the company is mentioned. Under this clause, the authorized capital divided by the company into such shares shall be mentioned. Authorized capital is the amount to which the company can raise funds.

Object clause

A detailed list of activities performed by the company after being mentioned in the object clause of the company's memorandum of association. The activities performed by the company include the commodity segment, which consists of two parts:

• Main Activity, and
• Activities ancillary to main business

The company is prohibited from doing business outside the scope of its goods. In this article, we are going to discuss the process of conducting business in addition to the objects mentioned in the object clause and its MOA for its modification.

Reason for object block modification

The following can be various reasons for which the company changes its commodity segment, which may or may not be the same:

• The company may want to scale up its business by expanding its scope of activities.
• To achieve the goals already set by the company in new or better ways.
• To run such additional business which can be easily integrated with the existing business of the company.
• To sell or dispose of a part of the business that may change the structure of the business.
• If the company is being amalgamated or combined with other companies, it needs to expand its current objective.

Amendment Process

If the company wants to pursue a business that is not mentioned in its clause, it will first be modified to add additional items after the secretarial process:

• Hold the Board Meeting

  Send the notice of 7 days to hold the Board Meeting to discuss the following agenda:

  • Take the approval of directors to amend the object clause of Memorandum.

  • Fix the date, time and venue to call the Extra-Ordinary General Meeting to get an approval of shareholders for change in object clause.

  • Approve the notice of EGM along with agenda to be discussed and an explanatory statement as per section 102 of Companies Act 2013.

• Operate EGM

  Seek shareholders approval by a special resolution passed in a duly operated EGM. Such a resolution would be passed by three-fourths of the majority. In the case of listed companies after passing the resolution, the company will send a copy of the resolution and its predecessor details to the stock exchange where its shares are listed. Special resolution will be passed by postal ballot in cases of companies:

  • A company with more than 200 members.

  • A Company has such money which remains unutilized that was raised through the issue of prospectus.

• ROC Filling

  After passing the special resolution, the company has to file a resolution passed in the MOA with the Registrar concerned with MGT-14along for the optional object clause with the prescribed fee within 3o days of passing such resolution. The following attachments will be attached to the form:

   

  •EGM's Notice

   

  • CTC of Special Resolution

  • Altered MOA

  • CTC of Board resolution passed

• Approval by ROC

  On receipt of the application, the registrar will check the same. Upon satisfaction of the correctness of an application, it will approve the change and certify the registration within 30 days of the filing of the special resolution.