Memorandum of Association (India)

Under Section 4 of the Companies Act 2013, the Memorandum of Association (MoA) of every company incorporated in India must contain the following mandatory clauses:

1. Name Clause: The name of the company, which must end with 'Private Limited' for private companies, 'Limited' for public companies, or 'OPC Private Limited' for One Person Companies. The name must not be identical or deceptively similar to any existing company or registered trademark, and must not contain words prohibited under the Companies (Incorporation) Rules 2014 (such as 'National,' 'Government,' 'Reserve Bank,' or similar words suggesting government connection without approval). 2. Registered Office Clause (Situation Clause): The name of the state in India in which the company's registered office is to be situated. This determines which Registrar of Companies (RoC) has jurisdiction over the company. Note that the full registered office address need not be in the MoA — it is filed separately in the incorporation forms. 3. Objects Clause: The objects for which the company is established. Under the Companies Act 2013, the objects clause is simplified compared to the earlier 1956 Act — only the 'main objects' need be stated. The doctrine of ultra vires (a company cannot act outside its objects) still applies, but the objects clause can be broad. For most modern companies, a single broadly drafted objects clause covers all business activities. 4.

Alteration of the Memorandum of Association in India is governed by the Companies Act 2013 and requires specific procedures depending on which clause is being altered. Unlike the earlier Companies Act 1956, which required court approval for certain alterations, the 2013 Act simplified the process and vested most alteration powers in the shareholders. 1. Name Clause: The company name can be changed by a special resolution (75% majority of votes cast) and approval by the Central Government (through the RoC). A new certificate of incorporation in the new name is issued. The change takes effect from the date of the new certificate. 2. Registered Office Clause (State Change): Changing the state of the registered office requires a special resolution AND the approval of the Central Government (Regional Director). Moving the registered office within the same state requires a special resolution and filing Form INC-23 with MCA. Moving within the same city or town requires only a board resolution and Form INC-22. 3. Objects Clause: The objects clause can be altered by a special resolution. If the company has issued shares to the public (listed company), additional procedural requirements apply. The alteration is effective upon filing the special resolution with MCA (Form MGT-14) within 30 days. Under the 2013 Act, a dissenting minority shareholder who voted against the alteration may apply to the NCLT under Section 13(9) if they believe the alteration is prejudicial to their interests. 4.

The doctrine of ultra vires ('beyond the powers') as applied to companies in India means that any act done by a company that is beyond the scope of its objects as defined in the Memorandum of Association is void and cannot be ratified by the shareholders or the board, no matter how beneficial the act may be. Historical Development: The doctrine was established by the English House of Lords in Ashbury Railway Carriage and Iron Company v. Riche (1875), and was applied rigorously in India under the Companies Act 1956. A company's objects clause was extremely narrow and specific under the 1956 Act, with separate categories for 'main objects,' 'objects incidental or ancillary,' and 'other objects' — requiring companies to specifically list every conceivable activity. Modern Position under Companies Act 2013: The Companies Act 2013 significantly relaxed the ultra vires doctrine by: (a) Requiring only a single 'Objects Clause' without the old tripartite division, enabling companies to draft broad and comprehensive objects. (b) Permitting companies to draft their objects so broadly (e.g., 'to carry on any business, activity, or enterprise whatsoever in India or abroad') that very few transactions can be truly ultra vires. However, the doctrine has not been abolished. If a company's MoA is narrowly or specifically drafted, acts outside those objects remain void and cannot be enforced against the company, even by bona fide third parties (subject to the indoor management rule — Turquand's case — which protects third parties in certain circumstances).

The distinction between authorised capital and paid-up capital is fundamental to understanding an Indian company's share capital structure as stated in the Memorandum of Association and the Companies Act 2013. Authorised Capital (also called 'Nominal Capital' or 'Registered Capital'): The maximum amount of share capital that a company is permitted to issue to shareholders under its Memorandum of Association. The MoA states the total authorised capital, divided into shares of a specified face value (e.g., '₹10,00,000 divided into 1,00,000 equity shares of ₹10 each'). The company cannot issue shares beyond this amount without first increasing the authorised capital by passing an ordinary resolution and filing Form SH-7 with MCA. Authorised capital attracts stamp duty and RoC filing fees upon incorporation and upon each increase. It does NOT represent actual money received by the company. Paid-Up Capital (also called 'Subscribed and Paid-Up Capital'): The actual amount of money or assets received by the company from shareholders in exchange for shares that have been allotted and fully paid for. Paid-up capital is always equal to or less than authorised capital. For example, a company may have ₹10,00,000 authorised capital but issue only ₹5,00,000 worth of shares (50,000 shares of ₹10 each) at incorporation — the paid-up capital is then ₹5,00,000. As of the Companies (Amendment) Act 2015, there is NO minimum paid-up capital requirement for private limited companies in India.

Yes, the Memorandum of Association and Articles of Association of a registered Indian company are public documents and can be inspected and obtained by any member of the public under the Companies Act 2013. MCA21 Portal: The Ministry of Corporate Affairs (MCA) maintains the MCA21 online portal (www.mca.gov.in) where all documents filed by companies with the Registrar of Companies (RoC) are accessible. This includes the MoA and AoA (in their current and amended forms), annual returns, financial statements, and other statutory filings. Anyone can access these documents by paying a nominal fee (currently ₹50–₹100 per document) and downloading them. Section 399 of the Companies Act 2013: Provides that the registers, documents, and returns required by the Act to be kept at the registered office of the company or filed with the RoC shall be open to inspection by any member of the public on payment of the prescribed fee. Right to Certified Copies: Any person may obtain a certified copy of the MoA or AoA from the RoC on payment of the prescribed fee. Certified copies carry the RoC's official seal and are admissible as evidence in court. Relevance for Third Parties: Because the MoA is a public document, persons dealing with the company are deemed to have constructive notice of the contents of the MoA — including the objects clause and capital structure. This is the 'doctrine of constructive notice,' which means a third party cannot claim ignorance of the MoA's contents as a defence if they transact with a company outside its stated objects.