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Memorandum of Association

What is the Memorandum of Association?

Memorandum of Association (MOA) is a legal document which specifies the scope of business activities of the company and information about shareholding of the company. The MOA is a document prepared for the Company registration procedure. Memorandum of Association (MOA) defines the company’s relationship with its shareholders. It is the most important document of a company as it states the objectives of the company. It also contains the powers of the company within which it can act.

The uses of Memorandum of Association

The Memorandum of Association (MOA) helps establish the extent and scope of the business activities that a particular company can carry out. The company can perform business activities which they have specified in the Memorandum of Association (MOA). MOA is used to define the company’s relationship with the shareholders. The MOA is a document of public record i.e. anyone who wishes to see a company’s MOA can do so under the Right to Information (RTI) Act. MOA also describes the company’s name, the physical address of the registered office, names of shareholders and the distribution of shares.

Memorandum of Association (MOA) consists of the following clauses :

  1. Name Clause: This clause specifies the name of the company. The name of the company should not be identical to any existing company. Also, if it is a private company, then it should have the word ‘Private Limited’ at the end. And in case of public company public company, then it should add the word “Limited” at the end of its name. For example, ABC Private Limited in case of the private, and ABC Ltd for a public company.                                                                        
  2. Registered Office Clause: This clause specifies the name of the State in which the registered office of the company is situated. This helps to determine the jurisdiction of the Registrar of Companies. The company is required to inform the location of the registered office to the Registrar of Companies within 30 days from the date of incorporation or commencement of the company.                                                                                                  
  3. Object Clause: This clause states the objective with which the company is formed. The objectives can be further divided into the following 3 subcategories:

i. Main Objective: It states the main business of the company

ii. Incidental Objective: These are the objects ancillary to the attainment of main objects of the company

iii. Other objectives: Any other objects which the company may pursue and are not covered in above (a) and (b)

  1. Liability Clause: It states the liability of the members of the company. In case of an unlimited company, the liability of the members is unlimited whereas in case of a company limited by shares, the liability of the members is restricted by the amount unpaid on their share. For a company limited by guarantee, the liability of the members is restricted by the amount each member has agreed to contribute.
  1. Capital Clause: This clause details the maximum capital that a company can raise which is also called the authorized/nominal capital of the company. This also explains the division of such capital amount into the number of shares of a fixed amount each.


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