What is memorandum association?explain its features

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Answer

Memorandum association is one of the documents which has to filled with the register of companies at the time of incorporation of company.the memorandum of association is an extremely important document in to affair of the company.it contains the fundamental condition upon which alone the company is allowed to be incorporated.According to section2(56)of the companies act 2013 , memorandum of association as originally fromed as
or altered from time to time in pursuance of any previous company law of that company.

Answer

It is an important corporate document .It has to be filled by registrar of companies during the process of incorporation of compnies.

Answer

Memorandum Association

A memorandum association, also known as a memorandum of association, is a legal document that sets out the constitution and framework of a company. It is one of the key documents required for the incorporation of a company and contains important information about the company's purpose, structure, and operations.

Features

1. Name and Registered Office
The memorandum of association includes the name of the company and its registered office address. The name must comply with the legal requirements and should not be identical or similar to any existing company name.

2. Object Clause
The object clause specifies the main objectives and activities that the company intends to undertake. It defines the scope of the company's operations and acts as a guide for its activities. Any activity not mentioned in the object clause cannot be pursued by the company.

3. Liability of Members
The memorandum of association states the liability of members in case the company faces financial distress or liquidation. It outlines whether the liability is limited or unlimited. In a limited liability company, the liability of members is limited to the amount they have invested or guaranteed to contribute.

4. Share Capital
The memorandum includes the authorized share capital of the company, which represents the maximum amount of capital that the company can raise by issuing shares. It also specifies the division of shares into different classes and the rights attached to each class.

5. Association Clauses
The association clauses define the relationship between the members of the company. It includes provisions related to the number of members, their rights, powers, and obligations. It also outlines the rules for the appointment and removal of directors, meetings, voting rights, and distribution of dividends.

6. Alteration and Amendment
The memorandum provides guidelines on how it can be altered or amended in the future. Any changes to the memorandum require the approval of the shareholders through a special resolution. This ensures that the company operates within the legal framework and allows for flexibility in adapting to changing circumstances.

7. Consequences of Non-compliance
The memorandum of association highlights the legal consequences of non-compliance with its provisions. It specifies the penalties, fines, or legal actions that may be imposed on the company or its members for any violation.

Conclusion
A memorandum association is a crucial legal document that outlines the fundamental aspects of a company's structure and operations. It plays a vital role in providing clarity and guidance to the company's stakeholders and ensures compliance with legal requirements.

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