Professional Documents
Culture Documents
Memorandum of Association
&
Articles of Association
Group No. 3
Anirban Halder (B14131)
Arunava Ray (B14137)
Gagandeep Singh (B14143)
Karan Chhabra (B14149)
Mihir Talnikar (B14155)
Prashnth Krishnan (B14161)
Incorporation
The process of legally declaring a corporate entity as separate from its owners.
Incorporation has many advantages for a business and its owners, including:
1) Protects the owner's assets against the company's liabilities
2) Allows for easy transfer of ownership to another party
3) Achieves a lower tax rate than on personal income
4) Receives more lenient tax restrictions on loss carry forwards
5) Can raise capital through the sale of stock
Incorporation involves drafting an "Articles of Incorporation", which lists the
primary purpose of the business and its location, along with the number of shares
and class of stock being issued, if any. Incorporation will also involve state-specific
registration information and fees.
Incorporation creates a protective bubble around a company's owners,
shareholders and directors. Incorporated businesses can take the risks that make
growth possible without exposing the shareholders, owners and directors to
personal financial liability outside of their original investments in the company.
Incorporation Stages
A company is said to be incorporated when it fulfils formalities of
registration and obtain the CERTIFICATE OF INCORPORATION by
submitting the MoA, AoA and written consent of all the directors.
A public to commence business should raise the required capital and
obtain the CERTIFICATE OF COMMENCEMENT OF BUSINESS
Company Categories
Company Categories
Public Limited
Private Limited
Section 25 company
Registration of company under PART IX
Producer Company
Types of Companies
Company limited by shares
Company limited by guarantee
Company with unlimited liability
Criteria
PUBLIC LIMITED COMPANY
Minimum seven subscribers
Minimum paid up capital of Rs.5 lacs
Minimum three directors
Requirements
The person who wishes to be the director of the firm has to apply for
DIN (Director Identification Number)
Apply to concerned Registrar of Companies to ascertain the name of
companies in eForm 1A.
After the name is approved the person has to fill the forms (form 1, 18
and 32) within 6 months of approval of name.
Process of INCORPORATION
Memorandum of Association
(MoA)
TheMemorandum of Associationofcompany defines and governs
the relationship of the company with the external world
It regulates acompany'sexternal activitiesand has to be submitted to
the Registrar of Companies upon during the incorporation phase
The MoA contains the name of the company, the state where its
registered office is located, its objectives and the liability of its
members (limited by shares or guarantee).
6. in the case of One Person Company, the name of the person who, in the event of death of
the subscriber, shall become the member of the company.
the details, as may be prescribed, in respect of such resolution shall also be published in the
newspapers (one in English and one in vernacular language) which is in circulation at the
place where the registered office of the company is situated and shall also be placed on the
website of the company, if any, indicating therein the justification for such change
b)
the dissenting shareholders shall be given an opportunity to exit by the promoters and
shareholders having control in accordance with regulations to be specified by the Securities
and Exchange Board.
Contents of MOA
Name
Clause
Registere
d Office
Clause
Capital
Clause
MoA
Liability
Clause
Objects
Clause
Objects Clause
Objects Clause
Articles of
Association(AoA)
Supreme document
Contents of AoA
Interpretation
Share capital and variation of rights
Transfer, Transmission, Forfeiture and Buyback of shares
Alteration of capital & Capitalisation of profits
General meetings & their Proceedings
Adjournment of meeting
Voting rights & Proxy
Board of Directors
Proceedings of the Board
Dividends and Reserve
Winding up
Indemnity
Companies Act,2013
Companies Act,1956
Contents of AoA
Interpretati
on
Share
capital and
variation of
rights, Lien
and Call on
Shares
Contents of AoA
Transfer &
Transmissi
on of
shares
Forfeiture
and
Buyback of
shares
Contents of AoA
Alteration
of capital &
Capitalisati
on of
profits
General
meetings &
their
Proceedings
Contents of AoA
Voting
rights
&
Proxy
Board
of
Directo
rs
Contents of AoA
Dividen
ds and
Reserve
Winding
up
Indemni
ty
Doctrine of Indoor-Management
(or TURQUAND rule)
It is exception to the rule of constructive notice.
Doctrine of constructive notice protects company against outsider, whereas
doctrine of Indoor-management protects the outsider against the company
How?
2 aspects of every transaction substantive, and procedural.
Outsider only knows substantive aspect.
He cannot trace internal procedures.
So, he can presume that all is being done regularly
SO, an outsider need not enquire into the regularity of the internal proceedings
(or indoor management)
Why is it called Turquand rule?
Doctrine of Indoor-Management
(or TURQUAND rule)
What if you make a deal with director of a firm, whose
-> appointment was defective ?
Or,
-> who have been delegated authority in a meeting which
lacked quorum ?
Suspicion of Irregularity
Forgery
Representation through articles
Acts outside the scope of apparent authority
Forgery
Representation through articles
Acts outside the scope of apparent authority
Object Clause
The most important clause prescribed in the
Company Act.
This clause in the MoA defines the objectives over
which the company is formed
Change in Object
Clause
Procedure for alteration in object clause:
Fix the date and time of the Extra-ordinary General Meeting to get
approval of the shareholders
Hold the Extra-ordinary General meeting (EGM) on due date and pass the
necessary Special Resolution under section 13(1) of the Companies Act,
2013, for change in object clause of Memorandum.
File form MGT.14 within 30 days of passing of Special Resolution with the
concerned Registrar of Companies, with prescribed fees and along with
following attachments:
1) Notice of EGM
2) Certified True copy of Special Resolution
3) Altered Memorandum of Association
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