MOA (Memorandum of Association) Format
An organization is formed when a group of people comes together to achieve a shared purpose. This is usually done for business reasons. Businesses are often formed in order to profit from their activities. A company must be formed by filing an application with the Registrar of Companies (ROC).
Your contribution must include a range of papers. One of the most crucial documents that must be submitted with the incorporation application is the MoA [full form Memorandum of Association].
What exactly is MoA?
The Memorandum of Association (MOA) is a legal document that outlines why the company was formed. It outlines the authority of the firm as well as the rules under which it operates. It is a book that contains all of a company’s rules and regulations for dealing with the outside world.
Each company must have a Memorandum of Agreement that describes the scope of its operations. Until the document is completed, the organization cannot function outside of its boundaries. If the company exceeds its power, the action is declared supra vires and so null and void.
That is the foundation upon which the company is formed. The Memorandum of Association describes the full structure of the corporation.
The memorandum is available to the media. Hence, a person who intends to engage into contracts with the company is only needed to pay the relevant fees to the Registrar of Companies and get the Memorandum of Association. The Memorandum of Agreement will teach him all he needs to know about the firm.
Everyone who conducts business with the company is responsible for being informed of its memoranda.
Goals of MoA Registration
The Memorandum of Association is a required document that contains critical information about the organization. According to Section 3 of the Act, the company may be founded if the following members agree to the memorandum:
- A public corporation must have seven or more members; a private firm must have two or more members.
- A One Person Company has just one member (OPC).
A corporation may be incorporated only if the Memorandum of Agreement (MoA) is developed and signed/subscribed to by the minimum numbers specified above. As a result, all firms must have a MoA in order to be registered.
Section 7(1)(a) of the Act further states that in order for a company to be registered with the ROC, its Memorandum of Association and Articles of Association (AoA) must be properly signed by the subscribers. While applying for business registration, the ROC should get a copy of the MoA. On payment of the necessary fees, the ROC may supply the public with a certified copy of the MoA.
It benefits stockholders in the following ways:
Enabling shareholders to learn about the firm before purchasing its stock and determining how much cash they can put in it.
Give all firm information to stakeholders that want to be a part of it.
MoA Format: Under Section 4(5) of the Companies Act, a memorandum may take any of the formats listed in Tables A, B, C, D, and E of Schedule
1. Tables come in a variety of styles due to the many sorts of companies.
Table A – is for a company with a share capital.
Table B – It applies to a company limited by guarantee that does not have a share capital.
Table C – It applies to a firm having a guarantee on its share capital.
Table D – It may be utilized by any uncontrolled company without a share capital.
Table E – Every unconstrained corporation with a share capital may utilize it.
The corporate memo should be typed, tallied, and divided into chapters. It may also be signed by consumers of the firm.
Goals of MOA Registration:
The Memorandum of Association is an important document that contains a lot of information about the organization. It is in charge of the company’s interactions with its stakeholders. A memorandum is necessary for the registration of a company, according to Section 3 of the Companies Act of 2013.
1. A public firm is supposed to have seven or more workers.
2. In the case of a private corporation, two or more individuals are required.
3. In the event of a one-person firm, just one person is anticipated.
Before registering the company with the Registrar, the parties concerned may first agree on a memorandum of understanding.
As a consequence, for business formation, a Memorandum of Association is necessary. To be incorporated, a company’s Memorandum of Association and Articles of Association must be duly signed by the subscribers and registered with the Registrar, according to Section 7(1)(a) of the Act.
A memorandum also provides additional information. There are many of them:
1. It assists shareholders in learning more about the company before acquiring shares. This helps shareholders determine how much money they can invest in the enterprise.
2. It notifies all partners who are interested in working with the company in some capacity.
Modification to the Memorandum of Agreement
If any of the following changes occur, it indicates that the memorandum of association must be amended:
• If there is a change in the company’s name.
• Whether there are any changes in the registration office.
• If there is a change in the business’s object clause.
• If there is a change in the authorized capital of the company.
• If any changes are made to the legal responsibilities of the company members.
The 13th clause of The Companies Act, 2013 specifies the steps to be followed when making any form of revision to the memorandum of association.
Memorandum of Association Clauses: MOA Contents
The contents of the association’s memorandum are made up of many provisions. Each sentence is critical to the organization. Let’s take a closer look at each of the courses listed below
1. Name Clause: The name clause of the MoA requires that all private limited company names must conclude with ‘private limited’. On the other hand, the names of all the government corporations should conclude with ‘limited’.
Companies covered by Section 8 of the act may be exempt from these regulations. These organizations are recognized by terms such as:
• Electoral Trust.
2. Registered Office Clause- specifies the specific location of the organization’s registered office. It is essential to indicate the branch of the registration office where the organization was formed.
3. Object Clause: This section of the memorandum of association defines the organization’s slogan and operations. If there is a change in activities and operations after a few months, the head of the institution must alter the name of that organization within 6 months. Otherwise, it will be considered an offense.
4. Capital Clause: it focuses on capital invested by two or more shareholders in a same firm. In the memorandum of association, we must provide information such as the quantities of shares held by each shareholder and how they created their rules, among other things.
Another essential kind of memorandum of association is the liability clause. In this section, we must clarify whether the members’ responsibility in the company is restricted or infinite.
If the corporation is limited by shares, the quantities owned by the shareholders and whether they are paid or unpaid must be specified. All of these points must be explicitly stated in the MOA.
If the corporation is bound by promises, the MoA states that all contributors who receive a bonus have equal rights. Even when a corporation is being wound up, both assets and liabilities, which include all expenditures incurred while deconstructing the organization, must be allocated equally.
5. Clause of Association: It is the memorandum of association’s last but not least class. The specific concept and aim of the company’s owner should be mentioned here.
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