- As per Section 2(56) of the Act “memorandum” means the memorandum of association of a company as originally framed and altered, from time to time, in pursuance of any previous company law or this Act.
- Memorandum of Associationis is one of the most essential pre-requisites for incorporating any form of company under the Companies Act, 2013, therefore it is called constitution of a company.
- It defines the scope of the company’s activities and its relations with the outside world.
- In the case of Ashbury Railway Carriage & Iron Co. Ltd. v. Riche, Lord Cairn observed: “The memorandum of association of a company is its charter and defines the limitations of the powers of the company.
- It is to be noted that the Companies Act, 2013 shall override the provisions in the memorandum and Articles of a company, if the latter contains anything contrary to the provisions in the Act (Section 6).
A memorandum contains following important clauses [Section 4(1)] -
1. Name Clause which contains name of the Company
2. Registered Office Clause which contains State of India where registered office of the company is situated
3. Objects Clause of the Company and matters considered necessary in furtherance thereof
4. Liability Clause which defines liability of members of the company, and
5. Share Capital Clause which defines Authorized share capital of the company.
6. Subscription clause which prescribes the number of shares which the subscribers to the memorandum agree to subscribe which shall not be less than one share.
Forms and Schedule related to Memorandum of Association
As per section 4(6) of Companies Act, 2013 memorandum of association should be in any one of the Forms specified in Tables A, B, C, D or E of Schedule I to the Act, as may be applicable in relation to the type of company proposed to be incorporated.
A company shall adopt any of the model Forms of the memorandum of association mentioned above, as may be applicable to it.