Memorandum of association or MOA is a legal document prepared and submitted to government at the time of company registration describing following things:
- Company name clause
- Physical address of registered office
- Main business objectives of the company
- Other or ancillary objects
- Authorized share capital
- Name, address and shareholding pattern of members
In our last articles, we have shown you how to register a private limited company, OPC and what are the precaution you should take to speed up the incorporation process. In this article, we will take you through 5 important points that you as an entrepreneur must check before signing company’s Memorandum of Association (MOA).
Before we start, please note that Memorandum of Association is to be attached while registering a OPC, private limited or public limited if registration is not by filing e-form INC-7 or else you have to file e-MOA.
In case of any alteration to MOA, the due process as stated in Companies Act,2013 has to be followed.
The first clause in a MOA is the “Name Clause”. You should state the legal approved name as per the certificate issued by the ministry of corporate affairs.
If you haven’t got approval yet, then apply for it first by using RUN feature at MCA site.
After getting your name approved, you can fill up this clause. To speed up the registration process, you can request your professional to draft everything else except the name clause. After getting the name approved, you can just copy paste it to MOA.
Below this clause, you will have registered office address clause. You should mention the state in which you are registering your office. It should match with the address and ROC you select in the registration form.
Main object clause – business objective
Main object clause is the most important part of the Memorandum of association (MOA).
In this clause, you are required to summarize the main objectives for registering the company.
Post incorporation, your company can only do those business activities which are mentioned in the main object clause.
In addition to the main object clause, you are also required to state ancillary or other objects of the company.
In it, you need to specify those activities that are required to facilitate the achievement of company’s main business objectives.
Drafting your main and ancillary objectives as per company’s business requirements takes time. Therefore, you should start the process simultaneously while applying for approval of company name.
Authorized share capital
Capital clause of the Memorandum of Association or MOA states the authorized and paid-up share capital.
Authorized share capital is the maximum amount that a company can raise from it’s members. It can always be increased after following due procedures as laid down in the companies act, 2013.
Paid-up share capital is the amount that the members have to contribute to the company in exchange of number of shares. Similar to authorized share capital, you can also raise this limit.
You should make sure that both limits are specified as per your requirements.
Subscriber page is where all the members are required to show the number of shares allotted against their name, address and signature. It must be signed by a witness.
If you are taking help of a practicing chartered accountant, company secretary, cost accountant and advocate, then they can act as a witness.
Maximum details of subscribers allowed through form SPICe MOA is seven. In case of more subscribers, you need to attach scanned copy of MOA and AOA with the SPICe form instead of filing the e-form SPICe-MOA (INC-33).
In SPICe form (INC-32), you need to mention the subscribers share capital in addition to the authorised share capital. You should make sure that the sum of subscribers capital as specified in SPICe_MOA is matching with the amount specified in SPICe form (INC-32).
Both subscribers and professional can use their digital signature certificate in e-MOA form and file it along with SPICe.