September 21, 2023

What is the Memorandum of Association (MOA)?

Starting a new business in India needs the business owner to finish the business incorporation process and give legal identity to the business. When a business owner chooses for company registration in India, there are certain legal formalities to be done and fulfilled with the Registrar of Companies (ROC), and one such necessity is having the Memorandum of Association (MOA) of the company in order. 

What Is the Memorandum of Association (MOA)?

A Memorandum of Association (MOA) is a written legal document that lays down the activities that will be done by the company and enumerate the details of the company’s shareholdings. An MOA of a company is similar to its charter and it is drafted at the time of company registration. 

The Memorandum of Association lays down the relationship between the company and its shareholders and defines the goals and objectives of the business in detail. Since the MOA lists the scope of the business, it must be changed as and when the company wishes to expand its activities. 

Importance Of Memorandum of Association

The Memorandum of Association (MOA) of a company is the most crucial legal document as it lists the scope of business activities that will be done by the company. The ROC checks this scope of activities and takes a decision on whether to allow company registration or not.

The MOA of a company is also the legal guidelines that describe the company’s relations with its directors, members, and shareholders.

Since the Memorandum of Association (MOA) is a compulsory document, it plays the most important role in the company registration. Without this document, a company couldn’t be registered under the Companies Act, 2013.

Memorandum of Association (MOA) For Company Registration

The MOA must be filed with the ROC for company registration in India. After the introduction of the new SPICe form, the business owners can deposit the MOA digitally with the ROC. The MOA, however, must be carefully prepared and signed by at least 2 subscribers in case of a Private Limited Company, and 7 members in case of a Public Limited Company. While, In the case of a One Person Company, the MOA must be signed by only the sole director of the company.

Important Clauses Of Memorandum of Association (MOA)

The Memorandum of Association (MOA) of a company must contain certain key clauses as per the Companies Act,. It is essential to consult a corporate lawyer in India to get the MOA prepared so that the document sticks to the key provisions of the Act and consists of all the required clauses. The most essential clauses of a Memorandum of Association (MOA) are:

Name Clause

The company can choose any name which is not similar to an already registered company. However, in the case of a Public Limited Company, it is essential to add ‘Limited’ to the name of the company, and in the case of a Private Limited Company, it is essential to add ‘Private Limited’ to the name.

Registered Office Clause

This clause defines the State in which the registered office of the company is located. The registered office of a company demonstrates the jurisdiction of the ROC and a company must give the details of its registered office to the ROC within 30 days from the date of company incorporation.

Objects Clause

The MOA must contain the objects clause that describes the objectives and scope of the business. The clause consists of the main objectives to be done by the business along with other incidental objectives of the business.

Liability Clause

The Liability Clause defines the liability of each member of the company. This clause acts as a protective clause for the shareholders by providing them protection from personal liability for the losses of the company. 

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Capital Clause

It defines the total amount of share capital in the company and the manner in which it is divided into shares. The capital clause also describes the total number of shares and the type of shares in which the capital of the company will be divided.

Subscription Clause

This clause lists the subscribers who are signing the MOA and the number of shares subscribed to by each member. Consult a corporate attorney in India to prepare the company’s MOA carefully with each clause described and detailed in an accurate manner.

Association Clause

The subscribers to the Memorandum make a declaration that they want to link themselves with the company and form an association in this clause. 

Memorandum of Association is the main document of a company and acts as the constitution that guides all the relations and decisions within the company and with the outside world. 


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