Memorandum of Association (MOA) is a legal document which is prepared in the formation and registration process of a limited liability company. It is called the charter of the company.
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 objects of the company for which it is formed. It also contains the powers of the company within which it can act.
The business that a company carries on is made according to the Memorandum of Association of the company. A company can carry on only those activities which are stated in the memorandum of association and to carry on any activity which is not stated in the memorandum of association, it has to alter the Memorandum of Association.
Memorandum of Association (MOA) includes five different clauses as mentioned below:
- Name Clause
- Situation Clause
- Object Clause
- Liability Clause
- Capital Clause
- Subscription Clause
The name of the company is its first unique identity. Thus the name clause of the memorandum consists of the authentic name of the company approved by the registrars.
The situation clause comprises of all possible details of the registered office of the company. It has the name of the state of the registered office and may and may not have the exact address of the office. It also has the names of the registrars enrolled.
Object Clause is the main body of the memorandum. It provides a list of all the operations of the country. Every motive and operation the company indulges in must be mentioned in the object clause. Also, any such operation which is not mentioned in the object clause is considered to be beyond the reach of the company.
Liability Clause mentions the liability of every member of the Company. It simply states that every member of the company has a limited liability. Thus, irrespective of the financial state of the company, no member can be told to pay more than the amount that remains unpaid on his shares.
This clause mentions the share capital with which the company is registered.
This clause states that it is mandatory for every subscriber to subscribe to at least one share of the company. Each and every subscriber has to fill subscription clause and also sign it. The subscription clause also requires a witness. Witnesses can be one or multiple.