There are six clauses in the Memorandum of Association [u/s. 13]-
- Name clause: This clause requires a company to state its name. A company to establish its identity must have a name. But no company should be registered by name which in the opinion too of the Central Government is undesirable and is identical with or which nearly resemble the name of an existing company [u/s. 20]. Every public company must use the word limited after its name and every private company must use the word private limited after its name.
- The registered office clause: it is a clause, which states the name of the state where the registered office of the company is to be situated. The two reasons for which the registered office clause is important are as follows:-
(i) It ascertains the domicile and the nationality of the company.
(ii) It is a place where various registers relating to the company are kept and to which all the messages and notices must be sent.
The notice of registered office should be given within 10 days from the date of incorporation, to the Registrar of Companies.
- The Object Clause:- It is one of the most essential clause in the Memorandum of Association of a company because it not only depicts the objects but also helps in determining the extent of the powers which the company can exercise in order to achieve the object or objects.
- The liability clause: It is a clause, which states the nature of the liability of the members. In case of a company limited by shares, the liability extends only to the amount unpaid on the shares taken. In case of a company limited by guarantee the members are liable only to the extent of the amount undertaken to be contributed by them to the assets of the company in event of its being wound up.
- Capital Clause: It is a clause which state the amount of the share capital with which the company is registered. And the number of shares into which the capital is divided and the amount of each share. It states the limit beyond which the company cannot go.
- Association or Subscription clause: The Association clause generally works in the following form “we the several persons whose names and addresses are subscribed are desirous of being formed into a company in pursuance of the Memorandum of Association and we respectively agree to take the number of shares in the capital of the company set opposite our respective names”.
Each subscriber to the Memorandum should pay for the shares for which he has subscribed.
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