What do you understand by Memorandum of Association? Explain the different clauses of Memorandum of Association.

 The Memorandum of Association or MOA is the legal document that has to be filed with the  registrar of companies at the time of incorporation of the company. It is often called as a  memorandum and is comprised of fundamental conditions on the basis of which a company  operates.

The memorandum of association is the most important document that needs to be formulated  with utmost care. It is the document that governs the relationship between the company and the  outside. Memorandum of Association serves as the constitution of the company that defines all  the rules and regulations that must be complied by every company. It is mandatory for every company that wants to get registered as a private/public limited to prepare the memorandum of  association.

Once the document is prepared the company cannot perform anything beyond the limit as  mentioned in the memorandum of association. Thus, this is considered as a supreme document  and comprises of following important clauses:

1. Name Clause: The name of the company that must end with the term “limited”. Also, it must be  ensured that the name selected for the company should not resemble with the name of any  existing company.

2. Registered Office Clause: This clause requires to mention the registered office address of the  company.

3. Objective Clause: The objective clause requires to mention clearly the objective behind the  incorporation of the company, i.e. the purpose for which the company is being established.

4. Liability Clause: This clause requires to mention the extent to which the shareholders are liable  to pay off the debt obligations in the event of the dissolution of the company.

5. Capital Clause: Company’s authorized capital along with the nominal value of all kinds of shares  need to be disclosed here. Also, the company is required to state the list of its assets over here.

6. Association Clause: As per this clause, the willingness of shareholders is required with respect to  their association with the company. For a public limited company minimum, seven members are  required to sign the memorandum, whereas in a case of a private limited company minimum two  members are required to do the same.

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