Various memorandums are to be prepared before the company’s incorporation. These are – Memorandum. Articles of Association, Association and Prospectus. In these memories, the memorandum of the association is the most important.
The memorandum of the association is the constitution of the company. It is called the base-stone of the company’s establishment.
According to Lord Cairns, the Association’s Memorendum is a company’s charter and defines its adolescence (the company’s action beyond which the area cannot be taken.
The content of the memorandum of any kind of Company is assessed in Section 13, according to which the following required details are required-
1.In Memorandum of the Unlimited Company.
(a) the name,
(b) household,
(c) objects.
2.In Company memorandum limited by guarantee without share capital-
(a) the name,
(b) Guarantee.
3.In Company memorandum limited by guarantee with share capital-
4.In shares limited by the company’s memorandum-
The above content of the memorandum is called Terms of Memorandum and each situation is called separately as clause of the memorandum (most of the word sentences or phrases in Hindi language also written for the section). The intention of various segments and legal ruling can be produced under it-
(a) Name section
(b) registered office or domicile section,
(c). Item section,
(d) liability clause,
(e) capital segment,
(f) Union and signature segment.
(1) Name section- Being a legal personality for its recognition, the company’s name is most necessary. This name is your unit mark. The company can be given any name. But the central government. Can prohibit the undesirable name or name similar to any other registered company name. A registered company acquires a monopolitisation in its name and it’s a mark of its business fame/restallation. If the liability of members is limited, the final word of the company’s name should be limited. Two things are primarily worth referring to in relation to the company’s name-
(i) any company may have any name which is similar or similar to any other incorporated company. If a company is in existence, whose name is adopted by a newly established company, it seems that there is a possibility of confusion or fraud in the public due to similar or similar names, then that company may contact the court for prohibition against that newly established company and force that the newly established company is not named. It is also notable in this regard that if a company incorrectly adopts such name as the name of another existing company, then the previous company may change its name after passing into a general proposal and acceptance received from the central government.
(ii) Another important thing about the company’s name is that every public company should complete the limited term with its name. Like intelligent for the private company, it is necessary to complete a limited word with a private name. Its aim is to interact well with all individuals related to the company from the point that the liability of its members is limited. The Central government may provide exemption from using the term limited or ‘private limited’ in certain circumstances. This can be done when the Company is established for the purpose of business, science, art, donation or any other useful item or the Company’s income is being used to fulfill those items without paying any kind of bonus to its members.
Changes in the company name – The company name can also be changed after receiving the written approval of the central government. and special offer approval to change the name. If the company’s registration is done in the name of the unwanted company or in the same name as any other company, the name can also be changed by a simple proposal. Central Government may also issue orders to change the name within the period of twelve months from the date of registration. After change in name becomes the duty of entering any fresh/new name to register and issuing a new certificate. There is no change in the company’s rights and liabilities at áccount of change to its name.
(2) Registered Office or Domysile Certificate – Second section of the Company’s memorandum belongs to the registered office of the Company that State name is only supported by the State in which the Company’s registered office is located. The state in which the company’s registered office has been established, is called the company’s domicile and the location where the company’s office is located is called the company’s residence. For the company’s registered office, only the state name is to be written and not complete address. Information about the exact location will have to be sent to Registrar within thirty days of the company’s incorporation business date. The company can only transfer its office within one city but if the office is to be transferred to another city in the same state then a special offer for this purpose should be passed/approved and information should reach the Registrar for this effect.
(3) Object Clause – Object Clause is the most imporal part of the memorandum because it mentioned the company’s jurisdiction and obJects. This section decides the company’s jurisdiction and the company cannot do anything beyond the assessment limit in it. While detecting your object the company has to pay special horizons per two things. First, there should be no such thing in the object section which is illegal and unlike law and secondly, the company must not be certified by the object section to do anything that violates the provisions of the Company Act.
Content of the object section – Some amendments in relation to the object section of the company are made by the Companies (Amendment) Act, 1965, according to which it will be quite enough to mention only the object in the memorandum of the object before the enactment of this Act, but those companies, which have come into existence after this amendment act, will divide their object section in two sub-clauses respectively –
(a) main objects and those casual or auxiliary objects which are for the fulfillment of the main objects, and.
(b) Other items
Assessment of goods is the right of promoters of the company. But after that they’re banned. The object should not be contrary to the laws and systems of the nation and companies Act. No company can be established for gambling advertising, as it is in contrast to the state’s policies and regulations. Objects are required for this purpose though the cumulative property is contained in the company. Therefore, the shareholders must have knowledge of fixed items through which the shareholders get security/shelter. The creditors also get protection from this as the company’s property cannot be used in tasks other than the assessment items.
Changes in the Goods – According to section 17 of the Companies Act, any companies can change themselves, in the following circumstances –
(1) It may change its object section if the company intends to run its business more efficiently and economically, but be cautious while changing objects are necessary that no change is made in adequate form of the Company and only changes are made which are required for the development and economy of the Company.
(2) The Company may adopt modern resources and scientific methods by changing its objects to develop its main purpose.
(3) The Company may change its objects to increase its local expansion jurisdiction.
(4) The Company may also change its items to dissolve it in another company.
(5) The Company may change the object section of its memorandum to limited or abandon any object mentioned in the memorandum.
If the shareholders are having any objection related to change, the Company Law Board should be informed in this regard that the application submitted by the Company should be notified to obtain approval for the purpose of change within three months from the date of receipt of this approval, the certified copy of the said order and a printed copy of change-membrance should be forwarded to the office of the Registrar by the Company. Within one month from the date of receipt of these copies, the Company Registrar will send a certificate of registration of change to the concerned company and the change will be considered effective from the day on which it has been registered.
If the company has not applied for registration within the pre-exposed period all efforts made in relation to changes in the objects shall not be made any use.
(4) Liability clause- A section of memorandum defines the liabilities of members. If the company is organized with liabilities, it should be complete that the liability of the members is limited by shares. This means that members’ shares are paid out in full, then their liability becomes zero. If the company is limited by guarantee, the amount of guarantee of each member will be explained in the section, which will be paid by him in the event of liquidation of the company.
The liability of directors or managers will be declared unlimited in the memorandum of the limited company (Section 322-323) in such a situation, the liability of the said officers will be unlimited.