Group Members

1. 2. 3. 4. 5. Sonia G.M Sameia Farhat Sadia Zia Saima Kausar Fatima Mazhar

Memorandum And Articles Of Association, Meetings And Winding-Up Of A Company

Memorandum of Association
Memorandum of association is one of the basic document of the company. It is knows as charter of the company. It contains the fundamental conditions upon which a company is registered. it defines the rights and objectives of the company.

Definition
It is document which sets out the constitution of the company. It is foundation on which the structure of the company is based.

The memorandum of association is the charter of the company. It defines the limitation and powers. It is a document which regulates the external affairs of the company. It is a fundamental document. It forms the basis of relationship between the company and the company outsiders.

Importance Of Memorandum Of Association

Purpose Of Memorandum Of Association

The main purpose of memorandum of association is to enable share holders, creditors and all those who concerned with the company to know what is permitted range of the enterprise.

Forms Of Memorandum Of Association

Memorandum of association should be in
printed form and divided into various paragraphs. At least seven persons in the case of public company and at least two in the case of a private company. Limited company by shares Limited company by guarantee without share capital Limited company by share capital Non--limited company

Alteration In Memorandum Of Association

Memorandum of association is considered as unalterable document But it can be amended by passing special resolution and with sanction of court of central government Time Place For Filing Memorandum Of Association Memorandum of association is to be filed with the registrar at the time of formation of a company.

Clauses Of Memorandum Of Association

1.Name clause:
This clause states the name of the company. A company may select any name but it should not resemble the name of any other company. The companys ordinance 1984 provides that the name of the company must end with the word limited. So that all persons dealing with the company must know that their liability is limited to the extent of their share The name must end with words limited or private limited.

2. Situation Clause
It is also known as domicile clause. The memorandum must state the name of the place of business of the company. The company must have a registered office and its place must be notified to the registrar. The state in which the registered office of the company is to be situated

Change Of Place Of Registered Office

(i) Form province to province
Registered office of the company may be changed by passing a special resolution and obtaining the confirmation of the commission. (ii) From town to town in the same province The place of registered office of the company may be changed from one town to another town with in the same province by special resolution and a notice to the registrar without any confirmation of the commission.

3. Object Clause
The statement of objects defines the sphere of the company activities. It determines and restricts the powers of the company. The object clause offer protection to the shareholders by ensuring them that amount collected for undertaking is not risked in any other undertaking The main objects of the company to be pursued by the company on its and defines the objects or aims for which the company is to be set up

Object Clause
Scope Of Objects The company can have any object provided that it is not contrary to law.
Act Done Outside The Objects The company cannot do anything outside the powers specified in the object clause.

Two Main Reasons Why A Company Needs To State Its Objects In The Memorandum Of Association
To inform its members how it will use the investors capital will use the investors capital its business. To inform its creditors &members of the public dealing with the company about rights of the company

 The fourth clause in a memorandum of association is a statement that liability of the company is limited to the extent of the shares purchased by them. This clause states that the liability of the members of the company is limited. The liability of members is limited if the company is limited by shares or by guarantee

4.Liability Clause

5. Capital Clause
The clause must state the amount of the capital and the way in which it is to be divided into shares. The capital as mentioned is called authorized or registered capital. The capital is divided into shares of a certain value which is specified in the capital clause. Total amount of share capital which is called authorized or registered capital

6.Association And Subscription Clause

This clause contains a declaration by the subscribers that they are desirous of forming a company and agree to have number of shares written against their respective names. (a) Signature and attestation: Each subscriber must sign the memorandum in the presence of at least one witness who shall attest the signature.

Articles of association are the document that specifies the regulations for a company's operations.

The Articles Of Association Defines: The company's purpose Lays out how tasks are to be accomplished within the organization, including the process for appointing directors and how financial records will be handled.

Meaning Of Articles Under Companies Act

Articles of Association of a company as originally framed or as altered from time to time in pursuance of any previous companies law or of this Act.

Purpose for Making Articles of Association

Contains rules and regulations, which govern the internal management of the company. The article of association is subordinate to the memorandum. Binds the company and its members as soon as they sign the document Articles of a company contains the organization and its control, issue of shares, voting rights of different classes of share holders, director's powers etc.

Articles Of Association Of A Company

All companies are required to adopt Articles of Association when they incorporate. Tables A to F of the Companies (Tables A to F) Regulations 1985 (more commonly known as Table A) set out standard model Articles, which companies can use as the basis for their own Articles. If companies do not register their own Articles of Association, Table A applies by default. The Articles of Association form the basis of a company's constitution and contain details of running the company, internal management affairs and liability.

The Article of Association contains the following details: 1. The powers of directors, officers and the shareholders as to voting etc., 2. The mode and form in which the business of the company is to be carried out 3. The mode and form in which the changes are in the internal regulations can be made. 4. The rights, duties and powers of the company as well as the members who are included in the Articles of Association.

Registration of the Articles

Every private company, an unlimited company and a company limited by guarantee must have their own Article and it should be registered with the Registrar of Companies along with the memorandum as per the Section 26 of the Companies Act, 1956.

Companies Which Must Have Their Own Articles

The following companies shall have their own articles, namely, 1. Unlimited companies, 2. Companies limited by guarantee, 3. Private companies limited by shares,

Unlimited company
In the case of an unlimited company, the Articles shall statei. The numbers with which the company is to be registered, and ii. If it has a share capital, the amount of share capital with which the company is to be registered

Company Limited By Guarantee

The case of a company limited by guarantee, the articles shall state the number of members with which the company is to be registered.

Private Company
In the case of a private company having a share capital, the Articles shall contain provisions whichi. Restrict the right to transfer shares, ii. Limit the number of its members to 50 (not including employee-members), and iii.Prohibit any invitation to the public to subscribe for any shares in, or debentures of, the company.

Definition of meeting
In a meeting, two or more people come together to discuss one or more topics, often in a formal setting.

Meetings may occur face to face or virtually, as mediated by communications technology, such as a telephone conference calls, a Skyped conference call or a videoconference.

Types of meetings
General Meetings Board Meetings Ad Hoc Meetings Kick-Off Meetings Management Meetings Off site Meetings One-On-One Meetings Pre-Bid Meetings Staff Meetings

General Meetings
Annual general meetings:
The usual business of an AGM is to receive the annual accounts and directors' report and, in some companies to elect directors and/or auditors.

Extraordinary general Meetings:

An Extraordinary General Meeting is any meeting other than an Annual General Meeting. The directors may call general meetings when they wish and must call a meeting of members holding one-tenth of the voting shares.

Board Meeting
Typical duties of boards of directors include: Establishing broad policies and objectives selecting, appointing, supporting and reviewing the performance of the chief executive approving annual budgets accounting to the stakeholders for the organization's performance Setting the salaries and compensation of company management

Ad Hoc Meetings
Ad hoc is a Latin phrase meaning "for this". Common examples are organizations, committees, and commissions created at the national or international level for a specific task. Ad hoc can also mean makeshift solutions, shifting contexts to create new meanings, inadequate planning, or improvised events.

Kickoff meetings
The Kickoff Meeting is the first meeting
with the project team and the client of the project. This meeting introduces the members of the project team and the client and provides the opportunity to discuss the role of each team member.

Management meeting
A meeting among managers of the company or organization.

These are the objectives of the meetings

To provide a Top Level Management Process for the organisation To review performance and progress To provide opportunities for developing our understanding of management

Off-site meeting
Also called "offsite retreat".
Company meetings held outside of the office can be great motivational tools. An off-site meeting can really shake things up and revitalize and reenergize your employees, building team spirit and getting everyones creative juices flowing again.

One-on-one meeting
Between two individuals/employees of the company or organization for any purpose.

Team meeting
A meeting among colleagues working on various aspects of a team project of the company or organization.

Pre-Bid Meeting
The meeting is normally hosted by the future customer or engineer who wrote the project specification to ensure all bidders are aware of the details and services expected of them.

Staff Meeting
Typically a meeting between a manager and those that report to the manager of the company or organization.

Advantages of Meetings
Meetings Build Good Working Relationship Meetings Boost Individual Morale Meetings Enhance Team Building

Disadvantages Of Meetings
Personality Control Conflicts May Occur

WINDING UP OF A COMPANY
Winding up of a company is defined as a process by which the life of a company is brought to an end and its property administered for the benefit of its members and creditors.

Liquidator
An administrator, called the liquidator, is appointed and he takes control of the company, collects its assets, pays debts and finally distributes any surplus among the members in accordance with their rights.

 Firstly, issuing a written demand for debt repayment to the target company. Secondly, presenting a winding up petition to the court and company. Thirdly, court hearing for the petition. Fourthly, granting up of winding up order by the court.

Winding up procedure

 Fifthly, meeting of creditors and other relevant parties. Sixthly, appointment of liquidator. Seventhly, realization and distribution of companys assets to the creditors. Eighthly, release of duties for liquidator. Lastly, dissolution of the company.

Winding up a Registered Company

Registered company: A company formed by registration under the Companies Act, 1956 is known as a registered company. The Companies Act provides for two modes of winding up a registered company:

Compulsory Winding Up or Winding up by the Tribunal

If the company has, by a Special Resolution, resolved that the company be wound up by the Tribunal. If default is made in delivering the statutory report to the Registrar or in holding the statutory meeting. If the company is unable to pay its debts.

 If the tribunal is of the opinion that it is just and equitable that the company should be wound up. Tribunal may inquire into the revival and rehabilitation of sick units. It its revival is unlikely, the tribunal can order its winding up. If the company has made a default in filing with the Registrar its balance sheet and profit and loss account or annual return for any five consecutive financial years.

The petition for winding up to the Tribunal may be made by : The company, in case of passing a special resolution for winding up. A creditor, in case of a company's inability to pay debts. A contributory or contributories, in case of a failure to hold a statutory meeting or to file a statutory report or in case of reduction of members below the statutory minimum.

Voluntary Winding Up of a Registered Company

When a company is wound up by the members or the creditors without the intervention of Tribunal, it is called as voluntary winding up. Members Voluntary Winding Up Creditor Voluntary Winding Up

Members' voluntary winding up: It is possible in the case of solvent companies

which are capable of paying their liabilities in full. There are two conditions for such winding up: A declaration of solvency must be made by a majority of directors, or all of them if they are two in number. Shareholders must pass an ordinary or special resolution for winding up of the company.

The Provisions Applicable To Members' Voluntary Winding Up Are As Follows: Filling up of vacancy caused by death, resignation or otherwise in the office of liquidator by the general meeting subject to an arrangement with the creditors. Sending the notice of appointment of liquidator to the Registrar. Power of liquidator to accept shares or like interest as a consideration for the sale of business of the company .

 Duty of liquidator to call creditors' meeting in case of insolvency of the company and place a statement of assets and liabilities before them. Liquidator's duty to convene a General Meeting at the end of each year. Liquidator's duty to make an account of winding up and lay the same before the final meeting.

Creditor's Voluntary Winding Up

It is possible in the case of insolvent companies. It requires the holding of meetings of creditors besides those of the members right from the beginning of the process of voluntary winding up. It is the creditors who get the right to appoint liquidator and hence, the winding up proceedings are dominated by the creditors.

The Provisions Applicable To Creditors' Voluntary Winding Up Are As Follows: A statement of position of the company and a list of creditors along with list of their claims shall be placed before the meeting of creditors. A five-member Committee of Inspection is appointed by creditors to supervise the work of liquidator. Fixation of remuneration of liquidator by creditors or committee of inspection.

Winding up an Unregistered Company

According to the Companies Act, an unregistered company includes any partnership, association, or company consisting of more than seven persons at the time when petition for winding up is presented. But it will not cover the following: A railway company A company registered under the Companies Act, 1956; A company registered under any previous company laws.

Procedure For Winding Up Unregistered Companies

Application of normal winding-up provisions Amendments to normal winding up provisions Seeking contributions from contributories Settling the list of contributories Calculating liability of contributory Making a request for payment Making a formal call on contributories Disqualification proceedings Reporting of criminal offences

Application Of Normal Winding-up Provisions

The normal winding up provisions of the insolvency legislation apply to the winding up of unregistered companies. The official receiver, as liquidator, and the court may exercise their powers or do any act in respect of an unregistered company as they would in relation to the winding up of a registered company. The official receiver should report to the Secretary of State on the conduct of the officers of the unregistered company and any criminal offences which he considers have been committed.

Amendments To Normal Winding Up Provisions

The official receiver should bear in mind the following differences in procedure when winding up an unregistered company: The principal place of business of an unregistered company is deemed to be the registered office for the purposes of determining a courts winding up jurisdiction. Once a winding-up order is made against an unregistered company, every contributory is liable to contribute to the assets of the company in so far as they are insufficient to meet the companys debts.

Seeking Contributions From Contributories

Where there are insufficient assets within the liquidation so that a call has to be made to the contributories, the official receiver should make an application to the Secretary of State for the appointment of an insolvency practitioner to act as liquidator where the meetings of creditors and contributories have failed to result in such an appointment.

Settling The List Of Contributories

A certificate of postage or delivery should be retained on the office file, together with a copy of the notice and the settled list. The liability of the contributory should be included in the notice. If the official receiver receives any objections to the settled list, he/she must within 14 days of receipt of it inform the objector, whether or not he/she will amend the list. The objector may apply to the court within 21 days of service of the notice for the list to be varied where the official receiver does not propose to amend the list.

Calculating Liability Of Contributory

The estimated expenses should be calculated
on the known deficiency of the unregistered company and not on the total possible realizations that would occur if all the contributories paid in full. If there is a dispute as to the amount fixed for the contribution, the contributory should be informed that he/she has an opportunity to appeal against it within 21 days of the service of the notice.

Making A Request For Payment

The letter to each contributory should inform them that: Unless suitable arrangements are made immediately for the payment of sums sufficient to meet his/her liability to contribute to the assets, a formal call will be made; Failure to pay such a call could result in legal proceedings to enforce payment (but the type of proceedings need not be specified at this stage); and It would be advisable for the contributory to consult with the other contributories to achieve an agreement as to payment.

Making A Formal Call On Contributories

It is not necessary to limit the amount claimed, nor should the official receiver have regard to whether or not any person is likely to pay. The call should be made for the whole of each contributorys liability to contribute to the deficiency.

Disqualification Proceedings
This includes a manager or any other person who has or has had control or management who is regarded as a director for the purposes of the Insolvency Act 1986. An undischarged bankrupt will commit an offence if he/she acts in the management of a company and the term "company" includes an unregistered company or an oversea company.

Reporting Of Criminal Offences

There are specific provisions which the official receiver needs to consider when making enquiries in relation to offences that may have been committed where certain types of entity are wound up as unregistered companies: Registered friendly societies EEIG The fraudulent trading provisions apply to an EEIG.