Memorandum of Association: All you need to know
1. What is Memorandum of Association (MoA)?
The Memorandum of Association (MoA) is a constitutional document of a company that defines:
The scope of the company’s activities,
The objectives for which the company is formed,
The powers of the company,
The relationship between the company and the outside world.
It is a fundamental document required for incorporation of a company under the Companies Act, 2013.
🔷 2. Legal Definition
Section 2(56) of the Companies Act, 2013 defines MoA as:
“Memorandum means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act.”
🔷 3. Contents of the Memorandum of Association
As per Section 4 and Table F (Schedule I) of the Companies Act, 2013, MoA must contain the following clauses:
(a) Name Clause
Specifies the name of the company.
The name must end with “Limited” or “Private Limited” depending on the type.
The name should not be identical or too similar to existing companies.
(b) Registered Office Clause
Specifies the state in which the registered office of the company will be situated.
This determines the jurisdiction of the Registrar and the courts.
(c) Objects Clause
Defines the main objects for which the company is incorporated.
Specifies ancillary or incidental objects necessary to achieve the main objects.
This clause limits the company’s activities.
(d) Liability Clause
States the liability of the members — limited by shares or guarantee.
Defines whether members’ liability is limited or unlimited.
(e) Capital Clause
Specifies the authorized share capital of the company and division into shares of fixed amount.
Applicable only to companies having share capital.
(f) Association Clause (Subscription Clause)
Names the founding members who subscribe to the MoA.
Each subscriber must sign and indicate the number of shares taken by them.
🔷 4. Importance of Memorandum of Association
It defines the scope of powers of the company (also called “ultra vires” limit).
Acts as a contract between the company and the members.
Acts as a contract between the company and the outside world.
All acts beyond the objects stated in the MoA are ultra vires (beyond powers) and void.
🔷 5. Doctrine of Ultra Vires
The company can only exercise powers within its MoA.
Acts beyond the objects stated in the MoA are void and unenforceable.
Protects shareholders and creditors by limiting the scope.
🔷 6. Alteration of MoA
MoA can be altered under Section 13 of the Companies Act, 2013.
Usually requires a special resolution passed by the shareholders.
Alterations must comply with law and cannot be fraudulent or against public policy.
🔷 7. Relevant Case Laws
✅ Ashbury Railway Carriage and Iron Co. Ltd. v. Riche (1875) LR 7 HL 653
Established the ultra vires doctrine.
The House of Lords held that any contract made beyond the objects clause is ultra vires and void.
✅ Attorney General v. Great Eastern Railway Co. (1880) 5 App Cas 473
Affirmed that the MoA binds the company externally.
Acts outside MoA are void, and the company cannot ratify them.
✅ Re Mumbai Urban Co-op Bank Ltd. (1990)
Citation: AIR 1990 Bom 342
The Bombay High Court held that any transaction beyond MoA is ultra vires and void.
The company cannot enforce contracts beyond its scope.
✅ Ashoka Marketing Ltd. v. Union of India (1977)
Citation: AIR 1977 SC 2373
The Supreme Court held that if an act is beyond the scope of MoA, it is not enforceable.
Reinforced the ultra vires doctrine.
✅ Rajasthan State Industrial Development & Investment Corporation Ltd. v. Diamond & Gem Development Corporation Ltd. (1992)
Citation: AIR 1992 SC 1417
The Supreme Court held that the Certificate of Incorporation is conclusive proof that the company is duly formed according to MoA.
MoA is a key document defining company’s existence.
🔷 8. MoA as a Public Document
MoA is a public document.
It must be filed with the Registrar of Companies and can be inspected by anyone.
This ensures transparency in company activities.
🔷 9. Summary
| Clause | Purpose |
|---|---|
| Name Clause | Company’s official name |
| Registered Office | State of the company’s registered office |
| Objects Clause | Defines scope and powers |
| Liability Clause | Member’s liability limits |
| Capital Clause | Authorized share capital |
| Association Clause | Subscribers’ details and shares |
🔷 10. Conclusion
The Memorandum of Association is the foundation of a company’s legal existence. It sets the boundaries within which a company must operate. The ultra vires doctrine ensures that the company does not act beyond its stated objectives, protecting shareholders, creditors, and the public.
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