What is MOA and it’s CLAUSES?

MOA a lawful document, which is prepared during the period of formation and registration of a company. It is one of the most necessary documents required to establish a company in every jurisdiction, such as India, the United Kingdom, and others. MOA stands for Memorandum of Association.

MOA contains company's name, company's address, the nature of the company's registered business, the name of the company's registered address, names, and signatures of the person being initial shareholders

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Any business must have its memorandum of association as it states the nature of its business. It is the most critical document of a registered company. As MOA sets up certain rules beyond which a company cannot go. When there is an infringement of a certain rule in that case such violation becomes ultra vires or invalid. 

The Memorandum of Association is a Public document. Any organization can get MOA by paying certain prescribed fee to ROC.

Purpose and Importance of MOA 

The Memorandum of Association is a necessary document containing essential company information. According to section 3 of the Act, the company may be established when the following proposed members subscribe to the memorandum:

• Seven or more persons in the case of a public company.
• Two or more members in case of a private company.
• There is only one member in the case of a One Person Company (OPC).

The MOA is the charter of a company. It is a contract between the company and the outside world. The MOA defines the scope and powers of the company; the detail sketches its objectives while clearly defining that which it is liable for and responsible for.

A company can be registered only when the MOA is drafted and it is signed/subscribed to by the minimum numbers as provided above. Thus, MOA of all companies is mandatorily required for company registration.

Read Our Blog: Memorandum of Association (MoA) Format Under Companies Act 2013

Clauses of MOA (Memorandum of Association)

Following are the major clauses of Memorandum of Association-

Name Clause: As the name itself suggests, this clause talks about the name of the company. Its name should not match the already existing company, so it comes under the work of the company's Clause is to look out whether the name of the company is legally appropriate. 

For Example- if it is a private company so it's mandatory to suffix the word "Private Limited".

Domicile Clause: It is the second clause of the MOA that shall mention the Place of Location of the company's Registered Office. The domicile clause shall mention the State or Union Territory where the company's Registered Office is situated.

Object Clause: The third clause in a company's Memorandum of Association, the object clause, outlines the goal associated with the commercial reason for establishing the company.

Liability Clause: This is the fourth clause contained in the memorandum of the company. A clause of limitation of liability or liability clause spells out the nature of damages that each party will pay to the other party in regard to the conditions and terms put forth in the contract.

Clause of Capital: It is the fifth Clause in the memorandum of the company, also considered as the company's authorized/nominal capital. It states the maximum capital a company can ever raise. Other than that, this explains the division of the capital into a quantity of share with a fixed amount.

Subscription Clause: The subscription clause is the sixth and the last primary clause of the Memorandum of Association. It states all about the fundamental subscribers of the company. It contains the name, signature, address and other details.

Conclusion

The Memorandum of Association is a necessary document it contains all the essential company information. It is a contract between the company and the outside world. It is one of the most necessary documents required to establish a company in every jurisdiction. A company can be registered only when the MOA is drafted and signed/ subscribed. Therefore, MOA of all companies is mandatorily required for company registration.