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Contents of Memorandum of Association

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Contents of Memorandum of Association

Contents of Memorandum of Association According to the Companies Act 1994, the Memorandum of Association must include the following Clauses:

1. Name Clause

Every company name must end with Limited (Ltd.). No name of the company should be the name of the existing company, king, queen, president, prime minister, Father of Nation or anything that signifies government sponsorship.

2. Situation and Address Clause

This clause should include the address and situation of the company, which is mention in the registration.

3. Area of Business

It should include the current and potential area of the business. It should be written carefully, because it made the boundary around the business operations.

4. Objective Clause

This clause is the most important clause of MA. This clause identifies the scope of the business. Beyond these identified scopes, the business can’t move. For example, If a company says its objective to do only Shoe business, it cannot do another business.

5. Liability Clause

This clause tells about the duties and responsibilities of the Owners; i.e., whether the share holders are liable for their share capital or promise.

6. Capital Clause

This clause includes the amount of capital, its type, each share price, etc.

7. Consent Clause

Here the directors declare in a written statement that they are agreeing to be the director of the proposed company by buying certain amount of a share. Generally, the promoters become the directors. This statement should include a witness and the directors’ signature with their name, address and occupation.

Distinction between the Memorandum of Association (MA) and Article of Association (AA)

Distinction no.Memorandum of AssociationArticle of Association

1

The MA of a company is its charter and defined the limitations of the powers of the company, established under the Company Act 1994

The AA of a company defines the rules and regulations concerning the internal affairs of the company.

2

The company can’t operate beyond this document

The AA has to follow the MA for any matter.

3

There is no supplement for the MA

Table-A could be used as the supplement of AA

4

It determine the nature of relationship with the third party

It determine the internal affairs of the company

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Farha Naaz on February 13, 2014:

Difference between MA and AA is now clear.....Thanks a lot

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thank for this post...I always remember this part of lecture.