Briefly explain the clauses of the Memorandum of Association.

• The Memorandum of Association is the principal document of a company.
• It is considered the charter of the company. 
• It contains the powers and objectives of the company. 
• It can be altered only according to the provisions made in the companies act regarding its alterations. 
• Memorandum of Association provides information to the outsiders.

The Memorandum of Association contains the following clauses:

1. Name clause:

• This clause contains the complete name of the company. 
• The company can choose any name subject to the following restrictions. 
• The name of the company must end with the word limited in the case of a public limited company and with the word private limited in the case of a private limited company. 
• The name should not be similar or identical to the name of any other company. 
• The name should not contain the word cooperative. The name should not convey any connection or link of the company with the government department.

Alteration of name clause: A company can change its name by passing a special resolution and by obtaining approval from the central government.

2. Address clause:

• This clause contains the name of the state in which the registered office of the company is to be located. 
• It is necessary because a company gets the registration from that state only. 
• A registered office is a place where all the important documents are kept. 
• A company must have a registered office when it starts its business activities or within 30 days whichever is earlier.

Alteration of address clause: A company may change its Registered office from

• One place to another place within the same city or town.
• One town or city to another town or city within the same state.
• One state to another state.
• In both these cases, a special resolution is to be passed in General Meeting.

3. Object clause:

• It is the most important clause of the Memorandum of Association. 
• It contains the main object of the company. 
• This clause defines the scope and limitations of the activities of the company. 
• The objects must be defined keeping in mind the following conditions: 
• the objects of the company must be legal. 
• the objects should not be contrary to the provisions of any law.
• the objects must not be immoral.

Alteration in object clause: In order to alter its object clause, a company must pass a special resolution.

4. Liability clause:

• This clause defines the liability of the members of the company. 
• In the case of a company limited by shares, the liability of the members is limited to the extent of the unpaid amount of share capital. 
• In the case of a company limited by guarantee, the liability is limited to the amount of guarantee.

Alteration of liability clause: If a company wants to make any alteration in its liability clause then it must pass a unanimous resolution in a meeting.

5. Capital clause:

• The clause specifies the amount of share capital with which a company is to be registered. 
• The capital with which a company is registered is called registered capital. A company can issue only that number of shares that are authorized by its memorandum.
• Alteration of the capital clause: A company can alter its capital clause by passing a special resolution and by obtaining approval from the company law board.

6. The Association clause or Subscription clause:

• A company is an association of persons, who subscribe to its capital.
• For a public company minimum of 7 persons must subscribe to a memorandum by signing it and giving their undertaking that each one shall buy at least one share of a company.
• For a private company minimum of 2 persons must subscribe to the Memorandum of Association by signing it and they also give an undertaking that each one shall buy at least one share of a company.
• Each subscriber has to put his name address and occupation in the presence of at least one witness who shall also put in his details.