Contents of the Memorandum Notes.

Contents of the Memorandum 

1. The name clause.

 2 . The registered office clause. 

3. The objects clause.

 4. The liability clause. 

5. The capital clause. 

6. The association clause or the subscription clause (based on Schedule I). 

1. The name clause. 

Under this clause the corporate name of Any suitable name can be chosen by a company, subject, however, to the following restrictions: 

(a) In the case of companies limited by shares or limited by guarantee, the word "Limited" or "Private Limited" must be the last word in the name of every public or private company respectively. 

(b) As per Section 4 (2), the name chosen must not: 

be too similar or similar to the name of another existing company. 

2 . The registered office clause. 

 The second clause of the memorandum must mention the name of the state in which the registered office of the company is to be located [Sec. 4 (1) (b)]. This is required in order to fix the domicile of the company, i.e, the place of its registration. Domicile must be distinguished from residence. While domicile is the place of its registration, residence is the place of its management and control.

Although the actual address of the registered office of the company is not required to be stated in the memorandum, every company must have specified premises in a town fixed as its registered office within 30 days of its incorporation. The company shall furnish to the Registrar (ROC) verification of its registered office within 30 days of its incorporation in the prescribed manner [Sec. 12 (1) (2)].

 Notice of the situation of the registered office andofevery change therein is to be given to the Registrar for record within 30 days of incorporation or date of change, as the case may be [Sec. 12 (4), as amended by the Companies (Amendment) Act, 2017]. Usually thenotice of thesituation of registered office is filed at the same time as the memorandum.

3. The objects clause.

 It is the most important clause of theme because it sets out the objects or Dires of the company. A company is entitled to do any business other than that specified in its objects clause is meant to protect firstly, the members, who can at once know which their money is to be employed and can be sure that their money is to be risked in an unknown activity or project and secondly, the publicati deal with the company, can at once know the extent of the company's do whether a particular transaction which is to beentered into with them is. the company or not.

4.The liability clause.

 In the case of acompany limited by shares. This clause states that the liability of members is limited to the amount, if any, unpaid on their shares. If it is proposed to register the company limited byguarantee thisclause state theamount which every member undertakes to contribute to theassesor the company in theevent of its winding up. A company registered with unlimited liability shall state in this clause that the liability of members is unlimited [sec. 4 (1) (d)].

 5. The capital clause.

 Every company having a share capital must state in this clause the amount of its share capital with which the company is proposed to be registered and the division thereof into shares of a fixed denomination and the number of shares which the subscribers to the memorandum agree to subscribe Sec. 4 (1) (e)]. 

 Read: Capital Subscription Short notes. 

The association or subscription clause. 

Under this clause we have the "declartion of association ", which is made by the signatories of the memorandum under their signatures dulvattested by witness, that they desire u naturesdulvattested bywitness that they desire to be formed into painy and that they agree to the purchase shares, if any , set against their respectuve names. Each subscriber must take at least one share. Theremust beat Teast seven signatories in case ofapublic company. At least two in caseoraprivate company and only one in case of one Person company. The subscribers usually act as first directors of the company. In the case of a company which is limited by guarantee or is having unlimited liability, and which has no share capital, the legal provision regarding the purchase of at least one share by each subscriber does not apply. Any provision in the memorandum or articles, in the case of a company limited by guarantee and not having ashare capital, shall not give any person a right to participate in the divisib le profits of the company otherwise than asa member [Sec. 4 (7)]. 

ALTERATION OF THE MEMORANDUM

(1) Alteration of name clause. A company may, by passing a resolution and with the approval of Central Government in writing change its name.

But no approval of Central Government is needed where the only change in the name is the addition thereto or the deletion there from the word "private" consequent on the conversion of a public company into aprivate company or vice versa. When any change in the name of the company is made, the company shall take notice of the change to the Registrar along with a copy of special resolution and a copy of the Central Government's order of approval within such time as may be prescribed. The Registrar shallenter thenew nameon the "Register of Companies" and the memorandum in place of the old name and shall issueafresh certificate of incorporation with the new name. It is only after this that the change becomes effective and the company can use the new name [Sec. 13 (1) (2) and (3)]. 

(2) Alteration of registered office clause. 

 A company may change its registered office within the same city by passinga board's resolution only to that effect. A notice is, however, to be given to the Registrar within 30 days of the Change, who shall record the same [Sec. 12 (4), as amended by the Companies (Amendment) Act, 2017]. If the company wants to shift its registered office from one city to another city within the same state, it must pass a special resolution authorizing the change and me its copy with the Registrar within 15days. Anotice of address of new location of the office must be given to the Registrar within 15days of the shifting of the office [Sec. 12 (5)].

Change of registered office from one state to another [Sec. 13 (4) (5) (6) and (7)]. 

firstly, a special resolution must be passed by the company and acopy its should be filed with the Registrar within such time as may be determined. 

Secondly, the sanction of the Central Government is to be obtained. before confirming thealteration theCentral Government satisfies it self that sufficientnotice has been given to the creditors and other persons, whose interest may be affected by the alteration, and they have given their consent, and that every such creditor whoobiects to it has either been paid in full or his debt has been fully secured . 

Thirdly, the acertified copy of the Central Government's confirmation order together with a printed copy of the altered memorandum must be filed with the Registrars of hoth the States within such time as may be prescribed. The Registrar of each State shall register the same and certify the registration. Further, the Registrar of the present State will send all the records and documents relating to the company to the Registrar of other State in due course. 

 Fourthly, certificates of registration of the transfer 'from both the Registrarsare obtained', and 

Lastly, the Registered Office isshifted to its new location in the other state and notice of the new address isgiven to the Registrar. The Registrar of the State where the registered office is beingshifted to, shall issue afresh certificate of incorporation indicating the alteration [Sec. 13 (7)].  

(3) Alteration of objects clause. 

 Alteration of objects. clause requires only the passing of special resolution. However, a company which has raised money from public through prospectusandstill has any unutilised amount out of the money so raised, shall not change its objects for which it has raised the money through prospectus unless aspecial resolution is passed by the company and:

the details, as may be prescribed, in respect of such resolution are published in the newspapers in the city where the registered office of the company is located and these details are also placed on the website of the company, if any, indicating therein the justification for such change 

the dissenting shareholders are given an opportunity to exit by the promoters and shareholders having control in accordance with regulations specified by the Securities and Exchange Board of India (SEBI).  

Alteration of liability clause. 

 A limited lability company may make its ability unlimited by passing an unanimous resoul naan unanimous resolution for re - registration as an  unlimited liability company.

(a) increase the nominal amount of its share capital by increasing the nominal amount of each of its shares, subject to the condition that no part of the increased capital shall be capable of being called up except in theevent and for the purpose

of the company being wound up: 

(b) provide that a specified portion of its uncalled share capital shall not the enabling of being called up except in the event and for the purpose of the company being wound up (Sec. 65) .

  Read :Incorporation of Companies Short notes.

(5) Alteration of capital clause.

 According to Section 61, acompany having ways:

 (a )share capital can alter the capital dause of its memorandum, in any of the following Talt may increase its authorized share capital. It is to be noted that further issue of unissued shares within authorized capital isgoverned by Section 62 of the Act and shall not alter the memorandum. The board of directors, if soauthorised by harticles. may increase the issued capital within the limit of authorized capital, dy passinga board's resolution. .

 (b) It may consolidate or sub - divide the whole or any part of itsexistinashares will be required for such consolidation and Hares of larger or smaller denominations. However, prior approval of Tribunal   will be rquired for such consolidation and division of shares which results in changes in the voting percentage of shareholders.

(d) It may cancel its unissued shares. i. e. shar may convertall or any of its fully paid - up shares into "stock" or vice versa. for by any person, and diminish the amount of its authorite ancel its unissued shares, ie, shareswhich havenot been subscribe amount of the shares so canceled. 

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