Company Debt Management and Business Articles » Memorandum Of Association http://www.companydebtmanagement.com Just another WordPress weblog Sun, 22 Jan 2012 08:54:30 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Articles of Association of a Company (A short note) http://www.companydebtmanagement.com/articles-of-association-of-a-company-a-short-note/ http://www.companydebtmanagement.com/articles-of-association-of-a-company-a-short-note/#comments Thu, 04 Jun 2009 12:03:08 +0000 admin http://www.companydebtmanagement.com/?p=16 Articles of Association are the rules regarding internal management of a company. These rules are subsidiary to the Memorandum of Association and hence, should not contradict or exceed anything stated in the Memorandum of Association. A public limited company may adopt Table A which is a model set of articles given in the Companies Act. Table A is a document containing rules and regulations for the internal management of a company. If a company adopts Table A, there is no need to prepare separate Articles of Association. For companies not adopting Table A, a copy of the Articles of Association, stamped and duly signed by signatories to the Memorandum of Association is required for registration.


Few of the noted features of Articles of Association are:
* Acts which are beyond Articles can be ratified by the members, provided they do not violate the Memorandum.
* Articles define the relationship of the members and the company.
* Articles can be altered by passing a special resolution by the members.
* Promoters have to decide about the members who will be signing the Articles of Association of the proposed company.
One of the strengths of Articles of Association is that it focuses more on the content, rather than on the form. These may include escalation procedures, process charts showing the method or the procedure of work, an organizational chart and last but not the least a simple and straightforward flow chart for the basis of accounting of that particular organization. However, a company or an organization must remember to have a set of formal articles of association if they wish to register themselves in more than one country and must address the minimum issues which are required by the laws prevailing in a country.

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]]> http://www.companydebtmanagement.com/articles-of-association-of-a-company-a-short-note/feed/ 0 Memorandum of Association of a Company (a short note) http://www.companydebtmanagement.com/memorandum-of-association-of-a-company-a-short-note/ http://www.companydebtmanagement.com/memorandum-of-association-of-a-company-a-short-note/#comments Thu, 04 Jun 2009 12:01:54 +0000 admin http://www.companydebtmanagement.com/?p=14 Memorandum of Association is the most important document as it defines the objectives of the company. No company can legally undertake activities that are not contained in its Memorandum of Association. The Memorandum of Association must be signed by at least seven persons in case of a public company and by two persons in case of a private company. The Memorandum of Association contains different clauses, which are given as follows:
The name clause: This clause contains the name of the company with which the company will be known, which has already been approved by the Registrar of Companies.

Objects clause: This is probably the most important clause of the memorandum. It defines the purpose for which the company is formed. A company is not legally entitled to undertake an activity, which is beyond the objects stated in this clause. The object clause is divided into two sub clauses, which are:
The main objects: The main objects for which the company is formed are listed in this sub-clause. It must be observed that an act which is either essential or incidental for the attainment of the main objects of the company is deemed to be valid, although it may not have been stated explicitly in the sub-clause.
Other objects: Objects not included in the main objects could be stated in this sub-clause. However, if a company wishes to undertake a business included in this sub clause, it has to either pass a special resolution or pass an ordinary resolution and get central government’s approval for the same.

Registered office clause: This clause contains the name of the state, in which the registered office of the company is proposed to be situated. The exact address of the registered office is not required at this stage but the same must be notified to the Registrar within thirty days of the incorporation of the company.

Capital clause: This clause specifies the maximum capital which the company will be authorized to raise through the issue of shares. The authorized share capital of the proposed company along with its division into the number of shares having a fixed face value is specified in this clause.

Association clause: In this clause, the signatories to the Memorandum of Association state their intention to be associated with the company and also give their consent to purchase qualification shares.

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