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Concept of MOA:

The Memorandum of Association (MOA) is an important document in the registration of a company. It is often considered the constitution of the company and outlines the scope of its rights and responsibilities. In case of dispute, the provisions in the Companies Act prevail over the clauses in the MOA. Essentially, the MOA is the base upon which a company operates and must be drafted carefully to ensure legal compliance and clarity.

The Memorandum of Association (MOA) outlines the objectives and aims of a company when it is being established. The company must operate within the object clause and cannot go beyond its stated objectives. If it does, any business dealings or transactions will be considered to be ultra vires and therefore void.

The MOA is a public document that is referenced when the company engages in any contracts or agreements with third parties.  Overall, the MOA serves as a blueprint for the company's operations, ensuring that it acts within its defined scope and purpose.

When drafting a Memorandum of Association (MOA), it is required to be prepared according to the format outlined in Table A-F of schedule I of Companies Act 2013. This table allows companies to choose from a variety of formats based on their status or type of business.

The following tables contain information related to the MOA of various types of companies:

Table A lists companies that are limited by shares.

Table B includes companies that are limited by guarantee and do not have any share capital.

Table C provides details about companies that are limited by guarantee and have share capital.

Table D lists unlimited companies.

Finally, Table E includes unlimited companies that have a share capital.

Importance of Understanding MOA Contents

The Company's Memorandum of Association (MOA) consists of the following essential clauses, highlighted below:

Registered Address Clause: This crucial clause specifies the state name where the Company is legally registered.

Name Clause: This serves as the primary clause in every MOA, and it must clearly indicate the Company's name, followed by the last word, such as Limited, OPC Private Limited, Private Limited, or any other based on the type of Company. Note that this requirement is not mandatory for Section 8 Companies.

Object Clause: which specifies the purpose of the company;

Liability Clause: which indicates the extent of the members' responsibility to the company; and 

Capital Clause: It determines the maximum amount of capital investment that the company can raise. The Capital Clause divides the authorized capital into a number of shares, allowing the company to fund its business activities up to the specified amount.

What are the reasons to change object clause of the company?

Reasons for altering the object clause of MOA:

- Increase business operations on a larger scale

- Achieve goals using new or improved methods

- Add additional business activities that can be combined with existing operations

- Sell or dispose of a portion of operations that modifies the structure of the business

- To expand object clause due to company merger or acquisition

How object clause has been defined in the MOA of the company?

The object clause in the Memorandum of Association specifies the business activities to be performed by a registered Company. It consists of two parts -

·         Main activities and

·         Activities that support main business of the company-The detailed information about the business activities performed by the Company is included in the object clause.

If a company engages in business activities that are not within the scope of its specified objectives in the Memorandum of Association, it will be banned.

The object clause outlines the company's goals and objectives, and any deviation from it could lead to consequences. To conduct business activities other than those stated in the MOA, the company must follow a specific procedure for rectification.

 Process for Modifying the Object Clause of the Company's MOA

If the Company intends to pursue business activities beyond those outlined in its object clause, it must first revise the clause to include the additional objectives through proper secretarial procedures.

Lead the Board Meeting

The task is to send a notice to conduct a Board Meeting within 7 days. The agenda of the meeting is to get approval from directors to amend the MOA's object clause. A venue, date, and time will be fixed to hold an Extra-Ordinary General Meeting to obtain shareholder approval for the amendment. The notice of EGM will be sanctioned along with the agenda and an explanatory report under section 102 of the Companies Act 2013.

Organize an extraordinary general meeting

To get approval from shareholders, a company must pass a special resolution with a 3/4 majority vote at an EGM. For named companies, a copy of the resolution must be sent to the stock exchange after it is passed. However, if a company has more than 200 members or has unused funds from a prospectus, it must use a Postal Ballot to pass the special resolution instead.

ROC Document Submission

Once a Special Resolution has been passed by a company, the next step is to submit the resolution for the alteration of the object clause in the Memorandum of Association (MOA) to the authorized Registrar using the MGT-14 form. This must be done within 30 days of passing the special resolution, along with the required fee. The following documents must also be attached:

·         Certified true copy (CTC) of the Special Resolution,

·         Notice of the Extraordinary General Meeting (EGM),

·         CTC of the Board resolution passed, and the

·         Altered MOA

Approval from Roc

The Registrar will audit an application for alteration and after verifying its correctness, approve the alteration and grant the registration certificate within 30 days of submission of a special resolution.