8.
Explanation
The Memorandum of Association (MOA) is a legal document that forms a vital part of a company’s constitution. It outlines the company’s objectives, powers, and scope of activities. The MOA serves as the company’s charter and defines the company’s relationship with the outside world. It is a
fundamental document that a company must register with the relevant government authority during its incorporation. The clauses included in the MOA typically cover the following aspects:
1. Name Clause: This clause states the official name of the company. The company must operate under the name mentioned in the MOA. Any changes to the name require approval and formal amendments to the MOA.
2. Registered Office Clause: This clause specifies the official address of the company’s registered office. It is the place where official correspondence and legal documents will be sent. Changes to the registered office must be communicated to the authorities.
3. Object Clause: The object clause outlines the main objectives and purposes for which the company is formed. It defines the activities the company is authorized to undertake. Any activities outside the scope of this clause require an alteration of the MOA.
4. Liability Clause: This clause indicates whether the liability of the members (shareholders) is limited or unlimited. In most companies, the liability of members is limited to the amount unpaid on their shares.
5. Capital Clause: The capital clause specifies the authorized share capital of the company and the division of shares into classes, if applicable.
6. Association Clause: This clause is a declaration of the subscribers’ intent to form and be part of the company.
7. Subscription Clause: This clause contains the names, addresses, and signatures of the subscribers who are initially investing in the company. They confirm their intention to take up shares in the company.
The MOA is a foundational document for a company, and it defines the company’s powers and constraints. Any changes to the MOA require approval from the company’s members and must follow legal procedures and governmental regulations.