Setting up a company requires some important legal documents. One of the most important ones is the Memorandum of Association (MoA). This document explains the basic details of the company including what it is allowed to do and what it cannot do.
If you are starting a company, you need to know about the MoA. This blog will explain it in very simple words so you can easily understand why it is important and how it helps a company.
What is a Memorandum of Association (MoA)?
A Memorandum of Association (MoA) is a legal paper that tells basic details about a company when it is created. It explains the company’s connection with its owners and what the company is allowed to do.
Simply put, the MoA acts like the rulebook of a company. It makes sure the company follows the limits set in this document. If the company does anything outside this document, it is called ultra vires (beyond its power) and is not allowed.
Why is the MoA Important?
The MoA is more than just a paper. It is a public record of a company’s goals, structure and limits. Here’s why it matters:
- Legal Need – A company cannot be formed without an MoA.
- Defines Business Scope – It clearly mentions what the company can do.
- Helps Investors – Investors can read it before putting money into the company.
- Builds Trust – Suppliers and partners check it before doing business.
- Follows Law – Government bodies refer to it to ensure compliance.
Main Parts of the Memorandum of Association
The Companies Act 2013 says that an MoA must have some important sections. Let’s look at them:
1. Name Clause
This part tells the official name of the company. It must be different from other company names and follow legal rules.
- Private companies must include “Private Limited” in their name.
- Public companies must include “Limited” in their name.
2. Registered Office Clause
This part tells the state and location of the company’s registered office. The company must inform the Registrar of Companies (ROC) about its office address within 30 days of registration.
3. Object Clause
This is the most important part because it explains what the company was made for. It includes:
- Main Objectives: The core business activities of the company.
- Incidental Objectives: Activities that help in achieving the main objectives.
- Other Objectives: Extra activities the company may do later.
4. Liability Clause
This part tells the liability of company owners:
- Limited by Shares: Owners are responsible only for the unpaid amount on shares.
- Limited by Guarantee: Owners pay a fixed amount if the company is closed.
- Unlimited Liability: Owners are responsible for all company debts.
5. Capital Clause
This part explains the maximum money the company can raise. It also mentions:
- The types of shares the company can issue.
- How the capital is divided into shares of a fixed amount.
Different Formats of Memorandum of Association
The Companies Act of 2013 provides different formats for an MoA based on the type of company:
Table | Used By |
Table A | Companies with Share Capital |
Table B | Companies Limited by Guarantee (No Share Capital) |
Table C | Companies Limited by Guarantee (With Share Capital) |
Table D | Unlimited Companies (No Share Capital) |
Table E | Unlimited Companies (With Share Capital) |
Alteration of the MoA
A company may need to update its MoA if it changes its name, office, business goals, capital or liability rules. The process includes:
- Board Meeting – The directors must approve the changes.
- General Meeting – Owners must vote for the change.
- Filing with ROC – A special resolution must be submitted within 30 days.
- Approval by ROC – The ROC reviews and approves the change.
Common Questions About MoA
1. What does the MoA begin with?
The MoA starts with the name clause followed by the registered office clause, object clause, liability clause and capital clause.
2. Is the MoA required for a startup?
Yes, every company including startups, must submit an MoA during registration.
3. Does an LLP need an MoA?
No, Limited Liability Partnerships (LLPs) follow a different legal framework and do not require an MoA.
4. Can a company change its MoA?
Yes, but changes must be approved by shareholders and filed with the ROC for legal compliance.
5. How can I get a copy of a company’s MoA?
Since the MoA is a public document, anyone can obtain a copy from the ROC by paying a prescribed fee.
Get Expert Assistance with Astute Attestation
The Memorandum of Association (MoA) is the most important document for a company. It explains what a company can and cannot do and keeps everything clear for owners, investors and authorities. Knowing about the MoA helps in making better business decisions.
If you need expert help with company registration and legal papers, choose Astute Attestation for professional and trusted services. As you know well, experts can handle the documentation more precisely.
