Memorandum & Articles of Association under

Companies Act,2013
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TG Team

CS M. Kurthalanathan

Memorandum and Articles of Association:

Introduction:

Memorandum of association is the charter of the company and defines the

scope of its activities. An article of association of the company is a document which
regulates the internal management of the company.

Memorandum of association defines the relation of the company with the rights of the
members of the company interest and also establishes the relationship of the company with
the members.

Definition- Memorandum:

As per Section 2(56) of the Companies Act,2013 “memorandum” means the

memorandum of association of a company as originally framed or as altered from time to
time in pursuance of any previous company law or of this Act.

Memorandum Of Association:

Section 4 of the Companies Act,2013 deals with MOA. The Memorandum of a company
shall contain the following;

1. Name Clause:

The name of the company with the last word “Limited” in the case of a public limited
company, or the last words “Private Limited” in the case of a private limited company.

2. Situation Clause:

The State in which the registered office of the company is to be situated.

3.Object Clause:

The objects for which the company is proposed to be incorporated and any matter
considered necessary in furtherance thereof.

4.Liability Clause:

The liability of members of the company, whether limited or unlimited, and also state,—

(i) in the case of a company limited by shares– liability of its members is limited to the
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amount unpaid, if any, on the shares held by them; and

(ii) in the case of a company limited by guarantee-the amount up to which each member
undertakes to contribute—

(A) to the assets of the company in the event of its being wound-up while he is a member or
within one year after he ceases to be a member, for payment of the debts and liabilities of
the company or of such debts and liabilities as may have been contracted before he
ceases to be a member,as the case may be; and

(B) to the costs, charges and expenses of winding-up and for adjustment of the rights of the
contributories among themselves;

5.Capital Clause:

(i) the amount of share capital with which the company is to be registered and the division
thereof into shares of a fixed amount and the number of shares which the subscribers to
the memorandum agree to subscribe which shall not be less than one share; and

(ii) the number of shares each subscriber to the memorandum intends to take, indicated
opposite his name;

In the case of One Person Company, the name of the person who, in the event of death of
the subscriber, shall become the member of the company.

Identical/undesirable names;

The name stated in the memorandum shall not—

(a) be identical with or resemble too nearly to the name of an existing company registered
under this Act or any previous company law; or

(b) be such that its use by the company—

(i) will constitute an offence under any law for the time being in force; or

(ii) is undesirable in the opinion of the Central Government

A company shall not be registered with a name which contains—

(a) any word or expression which is likely to give the impression that the company is in any
way connected with, or having the patronage of, the Central Government, any State
Government, or any local authority, corporation or body constituted by the Central
Government or any State Government under any law for the time being in force; or

(b) such word or expression, as prescribed in the Companies (Incorporation) Rules,

2014.

unless the previous approval of the Central Government has been obtained for the use of
any such word or expression.

Reservation of name:

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A person may make an application in Form No. INC.1 along with the fee as provided in the
Companies (Registration offices and fees) Rules, 2014 to the registrar for the
reservation of a name set out in the application as-

(a) the name of the proposed company; or

(b) the name to which the company proposes to change its name

The Registrar may, on the basis of information and documents furnished along with the
application, reserve the name for a period of sixty days from the date of the application.

Penalty:

If the company has not been incorporated, the reserved name shall be cancelled and the
person making application shall be liable to a penalty which may extend to Rs.1,00,000/-

Action:

If the company has been incorporated, the Registrar may, after giving the company
an opportunity of being heard—

either direct the company to change its name within a period of three months,
after passing an ordinary resolution;
take action for striking off the name of the company from the register of
companies; or
make a petition for winding up of the company.

Form of Memorandum:

The memorandum of a company shall be in respective forms as outlined below

S.No Table Form

1 Table A MOA of a company limited by shares

2 Table B MOA of a company limited by guarantee and not having share capital

3 Table C MOA of a company limited by guarantee and having share capital

4 Table D MOA of an unlimited company and not having share capital

5 Table E MOA of an unlimited company and having share capital

Any provision in the memorandum or articles, in the case of a company limited by

guarantee and not having a share capital, purporting to give any person a right to
participate in the divisible profits of the company otherwise than as a member, shall be void

MOA- CA2013 Vs CA1956:

S.No CA,2013 CA,1956

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 1 It requires classification of objects as(i) Objects for The objects of the company should be
which the company is proposed to be incorporated classified in the memorandum as(i)
and(ii) Any other matter considered necessary in main objects(ii) Incidental or ancillary
furtherance thereof. objects
(iii) Other objects

2 It requires that the memorandum shall state liability of The unlimited companies were not
members of the company whether unlimited or limited required to state in the memorandum
that liability of the members of the
company is unlimited.

3 A company shall not be registered with a name which There is no such provision
contains any word or expression which is likely to
give the impression that the company is in any way
connected with, or having the patronage of, the
Central Government, any State Government, or any
local authority, corporation or body

4 It incorporates the procedural aspects of application There is no such provision

for availability of name of proposed company or
proposed new name for existing company

5 It provides that the MOA of a company shall be in It provides that the MOA of a company
respective forms specified in Tables A,B,C,D,E of shall be in a such one of the forms in
Schedule I of the 2013 Act as may be applicable to Table B,C,D,E of Schedule I of the
the company.It does not allow the memorandum to 1956 Act as may be applicable to the
be in a form as near to the applicable Forms in case or in a Form as near thereto as
Schedule I as the circumstances admit the circumstances admit.

Articles of Association:

Definition –Articles:

As per Section 2(5) of the Companies Act,2013 “articles” means the articles of
association of a company as originally framed or as altered from time to time or applied in
pursuance of any previous company law or of this Act.

Section 5 of the Companies Act,2013 deals with AOA.

The articles of a company shall contain the regulations for management of the company.

The articles shall also contain such matters, as may be prescribed.

It shall be not prevent a company from including such additional matters in its articles as
may be considered necessary for its management.

Provisions for Retrenchment:

The articles may contain provisions for entrenchment to the effect that specified provisions
of the articles may be altered only if conditions or procedures as that are more restrictive
than those applicable in the case of a special resolution, are met or complied with.

The provisions for entrenchment shall only be made by

Private on formation of a company, or

Company by an amendment in the articles agreed to by all the members of the
company

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 Public company By a special resolution

Notice to Registrar:

Where the articles contain the provisions for entrenchment, the company shall give notice
to the Registrar of such provisions in Form No.INC.2 or Form No.INC.7, as the case may
be, along with the fee as provided in the Companies (Registration offices and fees)
Rules, 2014 at the time of incorporation of the company or in case of existing companies,
the same shall be filed in Form No.MGT.14 within thirty days from the date of
entrenchment of the articles, as the case may be, along with the fee as provided in the
Companies (Registration offices and fees) Rules, 2014

Form of Article :

The articles of a company shall be in respective forms as outlined below;

S.No Table Form

1 Table F AOA of a company limited by shares

2 Table G AOA of a company limited by guarantee and having share capital

3 Table H AOA of a company limited by guarantee and not having share capital

4 Table I AOA of an unlimited company and having share capital

5 Table J AOA of an unlimited company and not having share capital

A company may adopt all or any of the regulations contained in the model articles
applicable to such company.

In case of any company, which is registered after the commencement of this Act, in so far
as the registered articles of such company do not exclude or modify the regulations
contained in the model articles applicable to such company, those regulations shall, so far
as applicable, be the regulations of that company in the same manner and to the extent as
if they were contained in the duly registered articles of the company.

Nothing in this section shall apply to the articles of a company registered under any
previous company law unless amended under this Act

AOA- CA,2013 Vs CA,1956:

S.No CA,2013 CA,1956

1` It is compulsory for every company to have its own Optional for a Public company
articles and file the same with ROC for registration. limited by shares.Compulsory for
other Companies

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 2 The articles may contain provisions for There is no such provision
entrenchment.The provisions for entrenchment shall only
be made by;

Private on formation of a company, or

Company by an amendment in the articles agreed to
by all the members of the company

Public By a special resolution

company

The company shall give notice to the Registrar for

entrenchment provisions.

3 The articles of a company shall be in the respective The articles of any company, not
forms specified in Tables G,H,I,J in Schedule I as may being a company limited by shares
be applicable to such company. The liberty to have shall be in such Tables C,D,E in
articles or in a form as near thereto as circumstances Schedule I as may be applicable or
admit, which was available in the 1956 Act is no longer in a form as near thereto as
available in the 2013 Act. circumstances admit.

Disclaimer: The entire contents of this document have been prepared on the basis of
relevant provisions and as per the information existing at the time of the preparation.
Though utmost efforts has made to provide authentic information, it is suggested
that to have better understanding kindly cross-check the relevant sections, rules
under the Companies Act,2013

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