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 # What is a Memorandum of Association ???

Memorandum of association is the most important documents of a company. It is the charter or constitution of the company. It lays down the powers and objects of the company as well as the scope of operations of the company beyond which it cannot go.

The basic purpose of a memorandum of association of a company is to enable its shareholders, creditors, and the others to know its objects, powers and permitted range of activities.


The memorandum of association contains the following clauses :

1.NAME CLAUSE: Under this clause, the name of the company is stated. Any  suitable name may be chosen subject to the following restrictions :

1.the name of a company must end with the word limited if it is a public company and with the words private limited if it is a private company.

2.the proposed name should not convey that it has any patronage of the government.

3.the proposed name should not be identical or similar to the name of any existing company.

2.REGISTERED OFFICE CLAUSE: This clause contains the name of the state in which the registered office of the company is to be situated. this is required in order to fix the domicile or the place of registration of the company.

Along with the name of the state, the address of the registered office may also be mentioned in the memorandum. if it is not so mentioned, it may also be mentioned in the memorandum. if it is not so mentioned, it may be notified to the registrar of the companies within 30 days of the incorporation of the company.

3.OBJECTS CLAUSE: This may be regarded as the core of the memorandum. It sets out the objects with which a company is registered. the objects mentioned in the memorandum lay down the maximum permitted range of activities in which the company may engage and beyond which it cannot go.

The objects clause must specify the objects of the company  in the following order :

1.the main objects of the company to be pursued by the company on its incorporation and the objects incidental or ancillary to the attainment of the main objects, and

2. Other objects of the company not included in the above clause.


4.LIABILITY CLAUSE: This clause states that the liability of members is limited to the amount which they have agreed to contribute.

5. CAPITAL CLAUSE: This clause states the total amount of share capital with which a company is to be registered. The division of capital into shares of fixed denomination and the number and types of shares are also mentioned under this clause. Every limited company with share capital with share capital is required to give this clause.

6. SUBSCRIPTION OR ASSOCIATION CLAUSE: This clause contains the names and addresses of subscribers to the memorandum. The subscribers make a  declaration under their signatures duly attested by witnesses that they desire to be formed into a company and agree to take qualification shares if any. There must be at least seven signatories in case of a public company and at least two in case of a private company.