MOA Full Notes in Question and Answer

Memorandum of Association This question is based on Section 13 of the Companies Act, 2013. A company can change its name by complying with the following procedure: Change of Name Passing a BOD resolution Convening a General Meeting of members Passing SR in the General Meeting Board resolution to be sent to the ROC If the ROC approves, the company can change its name. The copy of SR passed at GM should be filed to the ROC. If the ROC is satisfied, it issues a new certificate of incorporation. Transfer of Registered Office This question is based on Section 17 and 18 of the Companies Act, 2013. There may be transfers of registered offices to any of the following four places: Within the same city or town Within the same district Within the same state To any other place The process for transferring the registered office involves: Passing a BOD resolution Convening a General Meeting of members Passing SR in the General Meeting Board resolution to be sent to the ROC If the ROC approves, the company can transfer its registered office. The copy of SR passed at GM should be filed to the ROC. If the ROC is satisfied, it issues a new certificate of incorporation. Shift of Registered Office A company can shift its registered office within the same city, town, or village by following the following procedure: Within the Same City, Town, or Village A BOD resolution needs to be passed. The resolution and copy of the resolution should be filed with the ROC within 15 days. Within the Same District A special resolution needs to be passed at a General Meeting of members. The copy of the SR along with necessary details should be filed with the ROC within 15 days. Within the Same State A change of ROC from one ROC jurisdiction to another within the same state is required. An application needs to be filed with the Regional Director. The Regional Director, on receiving the application, shall communicate to the company. The company shall file a letter of confirmation to the ROC within 60 days. The ROC shall register and notify the company and its documents within 30 days and issue a new certificate. Change of ROC from One State to Another A special resolution needs to be passed at a General Meeting of members. Approval of Central Government is also necessary. The company shall dispose of the application within 30 days. Before passing the order, the ROC shall satisfy itself that: Creditors, lenders, debenture holders, and other persons concerned with the company have been notified. Sufficient provision has been made for the discharge of all its debts and obligations. Adequate security has been provided for the discharge of all its debts and obligations. The ROC shall file with the state government of the state where the company is registered a certified copy of the CG order and the ROC shall register these documents. The ROC of the state where the ROC is being shifted to shall issue a fresh certificate of incorporation. The doctrine of ultra vires prevents a company from entering into contracts or transactions that are beyond its powers. A company that enters into an ultra vires act is acting outside its authority and such acts are void and cannot be ratified even by the entire body of shareholders. The case of Anand Prakash vs. ABBROC established the concept of ultra vires acts. Ms. L&R Pvt. Ltd. was authorized to trade solely in fruits and vegetables. Entering into a partnership for steel utensils with Mr. T was considered an ultra vires act and could not be ratified even by the entire body of shareholders. The question is based on Section 18 of the Companies Act, 2013. An alteration of the objects clause can only be made with the special resolution of the company. If a company was raised money from the public through a prospectus and still has unutilized money, it must comply with the following procedure to change its objects clause: Procedure for Changing Objects Clause Pass a Special Resolution at a general meeting. Publication: The details of the alteration should be published in newspapers in English and vernacular language. The notice should be placed at the registered office of the company and should also be placed on the website of the company, if any. Alteration of Liability Clause The alteration of the liability clause may be made only with the special resolution of the company. The resolution must be passed by three-fourths of the members present and voting. The company must file a copy of the special resolution with the ROC within 30 days. The ROC shall register the alteration and issue a certificate within 30 days. Answer The doctrine of limited liability is an essential clause in the MOA of all public and private companies. It protects the members from being personally liable for the company's debts and obligations. The present question states that the liability of the members has been increased by the company. This is not valid because the liability of members can only be increased by amending the MOA. However, Section 13 of the Act deals with the alteration of the MOA, not the liability clause. Importance of Registered Office The registered office is a place where: Notices, letters, etc. may be served upon the company Inspection may be made Communications may be sent The registered office of the company is determined by its place of jurisdiction. This is also important for determining the court governing it. Purpose for Having "Capital Clause" and "Liability Clause" in the MOA of a Company The liability clause in the MOA states the liability of the members of the company. In the case of a private limited company, the liability of the members is limited to the amount unpaid on the shares. Memorandum of Association The MOA is the document that governs the company. It specifies the name of the company, the location of its registered office, the objects of the company, the liability of members, and the capital of the company. The MOA can be altered by a special resolution passed by three-fourths of the members present and voting. The alteration must be filed with the Registrar of Companies (ROC) within 30 days. Capital Clause The capital clause of a company having a share capital must state: The amount of the share capital with which the company is to be registered.   The division of the share capital into shares of a fixed amount. Memorandum of Association Requirements Which Must Be Stated in MOA The memorandum of association must be printed, divided into paragraphs, numbered consecutively, and signed by each subscriber.   At least two subscribers must sign in the presence of at least one witness. The witnesses shall attest the signatures of the subscribers. Clauses to Be Stated in MOA The following clauses are contained in the MOA: Object Clause Name Clause Registered Office Clause Capital Clause Liability Clause Subscription Clause Change of Name The name of a company can be changed at any time by passing a special resolution or by filing with the ROC. However, certain types of companies cannot change their name unless the existing name is confusing or deceptive. Only the following words can be added to the name: "Private Limited" or "Limited." The SR and the application should be filed with the ROC. The Registrar shall enter the new name in the register of companies and issue a fresh certificate of incorporation. Exceptions/Conditions When Change of Name is Not Allowed The change of name shall not be allowed in a company: If the company has defaulted in the payment of initial dues for filing with the ROC. If the company has defaulted in the payment/repayment of matured deposits/debentures.