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MemorandumMemorandum
&&
Articles Of AssociationArticles Of Association
Submitted To:-
Dr. Rajendra Mishra
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³Contents´
Memorandum of Association Memorandum Clauses.
Alteration of Memorandum.
Doctrines of Ultra Vires.
Articles of Association Definition
Contents of Articles.
Alteration Of Articles.
Difference Between MOA & AOA.
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³Memorandum
Of Association´
Submitted By:-Harsh Udesh Bhat
MBA,Ist SEM
Roll No. 9
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³Memorandum Of Association´
Why Memorandum?
Share Holders.
Creditors.
Definition [Sec. 2(28)]
³Memorandum means Memorandum of
Association of a Company as originallyframed or as altered from time to time inpursuance of any previous Company lawor of the Companies Act of 1956.´
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³Memorandum Clauses´
Name clause
R egistered Office clause
Object
Clause
Liability Clause
AssociationClause
MOA
CapitalClause
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³Name Clause´ [Sec. 13(1)(a)]
Undesirable name to be avoided.
Injunction if identical name adopted. Limited or Private limited as the last
words of the name.
Prohibition of using certain namesand symbols.
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³Registered Office Clause´ [Sec 3(1)(b)]
Every company should have it¶s Fixed
Office. Notice of the situation of the Office
within 30 days of incorporation.
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³Object Clause´ [13(1)(c)(d)]
Object both defines and confines the
powers of Company. Useful for both Share holders and
Creditors.
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³The Capital Clause´[Sec 13(4)(a)]
Fixed share capital with which the
Company is to be installed. Fixed capital with which it is
registered is called ³RegisteredCapital´.
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³The Liability Clause´ [Sec. 13(2)]
Company limited by Shares or by
Guarantee shall also state the liabilityof its members.
If the number of members falls belowthe statutory minimum, then the
members who are a part of thecompany are responsible for thedebts.
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³The Association Clause´ [13(4)(c)]
We the persons whose names and
addresses are incorporated in theMemorandum, agree to take thenumber of Shares in the Capital.
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³Alteration Of Memorandum Of Association´
Change Of Name.
Change of Registered Office. Alteration of Objects.
Change in Liability Clause.
Change in capital.
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³Doctrine of Ultra Vires´
Ultra = ³Beyond´ & Vires = ³Power´.
Ultra Vires the Company.
Ultra Vires the Directors.
Ultra Vires the Articles.
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Doctrine of Ultra Vires
Any activity done contrary to or in excess of the
scope of activity of the Companies Act, MoA,
AOA will be Ultra Vires. The Doctrine of Ultra Vires has been affirmed
by The Supreme court in lakshmana Swami
Mudalair VS Life Insurance Corporation Of India.
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In this case, the Directors were authorized, ³To
make payments towards any charitable or for
any general public or useful Object.´
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Effects Of Ultra Vires Transctions
Act Null and Void.
Company cannot sue or be used.
Injuction.
Personal Liability of Directors.
Ultra Vires borrowings.
Ultra Vires Contracts.
Ultra Vires Trots.
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Constructive Notice Of MOA and
AOA. Every person who deals with the Company, is
presumed to have read the MOA & AOA of the
company and is deemed to know the contents of these documents.
Therefore, the knowledge of these documents &
their contents is known as the constructivenotice of AOA & MOA.
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It is presumed that persons dealing with the
company have not only read these documents
but have also understood their proper meaning.(Oak Bank Oil Co. vs Crum.)
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Doctrine of Indoor Managemnt
The outsiders dealing with the company are
entitled to assume that as far as the internal
Proceedings of the company are concerned, everything has been regularly done.
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Royal British Bank VS Turquand
Premier Industrial Bank Limited. VS Carlton
Mfg. Co. Ltd.
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³Articles Of Association´
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³Articles of Association[sec.2(2)]´
Definition:-
³The Articles of Association of a companyas originally framed or as altered fromtime to time in pursuance of this Act,including so far as they apply to the
Company, the regulations contained inTable A in Schedule I annexed to thisAct´
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³Properties of AOA´
Next important to Memorandum of
Association´
Must not violate the Memorandumand the Act .
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³Content of Articles´ Share Capital &Variation
of rights.
Lien of Company onShares.
Calls on shares
Share Certificate
Transfer of Shares
Transmission
Forfeiture of Shares Conversion of Shares
with Stocks
Share warrants
Alteration of ShareCapital
General Meeting
Proceedings at generalmeetings.
Notes by members. Board of Directors and
their Powers.
Capitalization.
Winding Up.
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³Application of AOA´ Unlimited Companies.
Companies limited by Guarantee.
Having share Capital. Do not have Share Capital.
Private Company.
Restricting number of members.
Right to transfer of Shares
Prohibition of any Public involvement.
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³Alteration Of Articles´ Must not be inconsistent with the Act.
Must not Conflict with Memorandum
Must not sanction anything illegal. Must be benefit for the company.
Must not increase Liability of Members.
Alteration by Special resolution.
Approval of Government when PublicCompany is converted into Privatecompany.
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³MOA´ ³AOA´ It is the Charter of the
company indicating thenature of its Business.
It defines the Scope of theActivities of the Company.
It being the Charter of theCompany is the ³SupremeDocument´
Every Company Must haveits own Memorandum.
There are strict Restrictions
on its alteration. Ultra wires the
Memorandum is whollyvoid.
They are regulations for theinternal management of theCompany.
They are the rules forcarrying out the Objects of
the company. They are Subordinate to the
Memorandum.
A company limited byshares need not haveArticles of its own. Table A
Can be altered by Specialresolution.
Ultra Vires the Articles canbe confirmed.
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