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MEMORANDUM

AND
ARTICLES OF ASSOCIATION

Presented By :

Manoj Kumar Baniya


MBA 1 st sem
Roll no . 21
STAGES INVOLVED IN FORMATION OF
COMPANY

1.Promotion
2.
3.Registration
4.
5.Certificate of Incorporation
6.
7.Floatation
8.
9.Commencement of Business
MEMORANDUM OF ASSOCIATION

ØIt is regarded as the fundamental document of the company.


Ø
ØIt contains the fundamental conditions upon which alone the
company can be incorporated.
Ø
ØIt tells us the objects of the company’s formation and the
utmost possible scope of its operations beyond which its
action cannot go.
PURPOSE OF MEMORANDUM

ØThe prospective share holders know the field in, or the purpose
for which their money is going to be used by the company and
what risk they are undertaking in making investment.
Ø
ØThe outsiders dealing with the company know with certainty as
to what the objects of the company are and as to whether the
contractual relation into which they are going to enter the
company is within the objects of the company.
CONTENTS OF MEMORANDUM

1.The name of the company: ‘limited’ & ‘private limited’.


2.The state in which the registered office of the company is to
be situated.
3.The object of the company which shall be classified as:
a. The main objects of the company;
b. Objects incidental or ancillary to the attainment of the
main objects , and
c. Other objects of the company not included in (a) and (b).
4.In the case of companies (other than trading corporations) with
objects not confined to one State, the States to whose
territories the objects extend.
5.Liability of the members: the memorandum of a company limited by
shared or by guarantee shall also state that the liability of
its members is limited.
6.Share capital: in the case of a company having share capital the
memorandum shall state the amount of share capital with which
the company is to be registered and the division thereof into
shares of a fixed amount.
FORMS OF MEMORANDUM

ØPrinted
Ø
ØDivided into paragraphs numbered consecutively, and
Ø
ØSigned by 7(2 in case of private company) subscribers.
ARTICLES OF ASSOCIATION

ØThese are the rules, regulations and bye-laws for the internal
management of the affairs of a company.
Ø
ØThey define the duties, rights, powers and authority of the
shareholders and the directors in their respective capacities
and of the company.
Ø
ØIt also defines the mode and form in which the business of the
company is to be carried out.
CONTENTS OF ARTICLES
1.Share capital, rights of shareholders, variation of these
rights, payment of commission.
2.Lien on share
3.Calls on share
4.Transfer of shares
5.Transmission of shares
6.Forfeiture of shares
7.Conversion of shares into stock
8.Share warrants
9.Alteration of capital
10.General meetings and proceeding thereat
11.Voting rights of members, voting and poll
12.Directors, their appointment, remuneration, qualification,
powers and proceedings of Board of Directors
13.Manager, Secretary
14.Dividends and reserves
15.Accounts, audit and borrowing powers
16.Capitalization of profits
LIMITATIONS

1.Must not be inconsistent with the Act.


2.Must not conflict with the memorandum.
3.Must not sanction anything illegal.
4.Must be for the benefit of the company.
5.Must not increase liability of members.
6.Alteration by special resolution only.
7.Approval of central government when a public company is
converted into a private company.
8.Breach of contract.
9.No power of the Court to amend Articles.
10.Alteration may be due to past events.
THANK U