Overview

The Memorandum of Association (MOA) is the foundation of any company being incorporated. It serves as the company's constitution, outlining the scope of its powers and rights. In the event of any conflict between the Companies Act and the clauses of the Memorandum, the provisions of the law will prevail.

The object clause in the MOA defines the company's objectives and operational scope. A company cannot engage in activities beyond its object clause; any such actions would be considered ultra vires and, therefore, void. When a company enters into contracts, agreements, or arrangements with third parties, the MOA functions as a public document.

The MOA must be drafted in accordance with the format provided in Tables A-F of Schedule I of the Companies Act 2013. The relevant tables for different types of companies are:

1.       Table A: MOA for companies limited by shares.

2.       Table B: MOA for companies limited by guarantee without share capital.

3.       Table C: MOA for companies limited by guarantee with share capital.

4.       Table D: MOA for unlimited companies.

5.       Table E: MOA for unlimited companies with share capital.

Object Clause in Memorandum of Association

The object clause details the activities a company intends to undertake after incorporation. These activities are divided into two categories:

1.      Main business activities

2.      Ancillary activities supporting the main business

A company is strictly prohibited from operating outside its stated objects.

Reasons to Amend Object Clause

Companies may need to amend their object clause for several reasons, including:

1.       Expanding business operations and scope.

2.       Adopting new or improved methods to achieve existing goals.

3.       Engaging in additional business activities that align with the current operations.

4.       Selling or restructuring parts of the business.

Contents of Memorandum of Association

The MOA consists of the following clauses:

1.    Name Clause: Specifies the company’s name, ending with “Private Limited,” “Limited,” or “OPC Private Limited,” depending on the type. Section 8 companies are exempt from this requirement.

2.    Registered Address Clause: States the registered office's location.

3.    Object Clause: Defines the company's objectives.

4.    Liability Clause: Specifies whether members’ liability is limited or unlimited.

5.      Capital Clause: Details the company's authorized capital and share division..

Registration Procedure for Amendment of Object Clause

If a company wishes to undertake activities outside its existing object clause, it must amend its MOA by following these steps:

1. Call a Board Meeting

1.       Issue a notice at least seven days before the board meeting, attaching the agenda, notes, and draft resolution.

2.       Hold the board meeting to propose and discuss new objects.

3.       Pass a board resolution and approve the proposed amendments.

4.       Schedule an Extraordinary General Meeting (EGM) and appoint a director to send notices to members.

5.       Issue a notice for the EGM at least 21 days before the meeting, outlining the business to be discussed.

2. Hold an Extraordinary General Meeting

1.       Pass a special resolution approving the object clause amendment.

2.       A three-fourth majority is required for approval.

3.       In the case of listed companies, notify the stock exchange where shares are listed.

4.       Conduct a postal ballot if the company has over 200 members or unutilized funds from a public issue.

3. Filing and Fees

1.       Submit Form MGT-14 to the Registrar within 30 days of passing the special resolution.

2.       Attach the following documents:

o    Certified copy of the special resolution.

o    Copy of notice sent to members.

o    Amended MOA.

o    Attendance sheet from the EGM.

4. Issuance of Certificate

Upon verification, the Registrar will approve the amendment and issue a registration certificate, serving as conclusive proof of the MOA changes.

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