Memmrandum_of_Association_and_Its_Object_Clauses

NAME: BABOUCARR BOJANG MAT #: 2101080 SCHOOL: BUSINESS AND PUBLIC ADMINSTRATION SUBJECT: COMPANY LAW ASSIGNMENT: MEMORANDUM OF ASSOCIATION AND ITS OBJECT CLAUSES Memorandum of Association   This is a document that regulates a firm's external activities and must be drawn up on the formation of a registered or incorporated firm. As the firm's charter it (together with the firm's articles of association) forms the firm's constitution. Also called 'memorandum,' it gives the firm's name, names of its members (shareholders) and number of shares held by them, and location of its registered office. It also states the firm's (1) Objectives, (2) Amount of authorized share capital, (3) Whether liability of its members is limited by shares or by guaranty (4) What type of contracts the firm is allowed to enter into. Almost all of its provisions (except those mandated by corporate legislation) can be altered by the firm's members by following the prescribed procedures. The memorandum is a public document and may be inspected (normally on payment of a fee) by anyone, usually at the public office where it is lodged. The memorandum of association of a company, often simply called the memorandum (and then often capitalized as an abbreviation for the official name, which is a proper noun and usually includes other words), is the document that governs the relationship between the company and the outside. It is one of the documents required to incorporate a company in the United Kingdom, Ireland, Pakistan and India, and is also used in many of the common law jurisdictions of the Commonwealth. While it is still necessary to file a memorandum of association to incorporate a new company, it no longer forms part of the company’s constitution and it contains limited information compared to the memorandum that was required prior to 1 October 2009. It is basically a statement that the subscribers wish to form a company under the 2006 Act, have agreed to become members and, in the case of a company that is to have a share capital, to take at least one shares each. It is no longer required to state the name of the company, the type of company (such as public limited company or private company limited by shares), the location of its registered office, the objects of the company, and it’s authorized share capital. Companies incorporated prior to 1 October 2009 are not required to amend their memorandum. Those details which are now required to appear in the Articles, such as the objects clause and details of the share capital are deemed to form part of the Articles. Clauses of memorandum of associations: There are many clause related to the memorandum of association. Some of them are as follows: 1-Name Clause: According to this an existing company registered with the registrar of the company we have to state the name of the company. A company may adopt any name but it should not be identical to the name of. 2- Situation Clause: As the name indicates it describes the different situations. This clause a company must have a registered office at which all the communications and notices are to be addressed. The memorandum will only state the name of the province where office is situated and not the address where office is situated. 3-Object Clause: This is the most important clause in the memorandum. It clearly defines the sphere of the company's activities. The main objects of the company must be stated and must correspond with the principal activity identified in Form A1 4-Liability Clause: This clause of memorandum contains the declaration that the liability of the shareholders is limited to the extent of the value of shares held by them. 5-Capital Clause: This clause is required to specify the amount of share capital with which the company proposes to be registered and secondly the divisions of that capital into shares of a fixed amount. 6-Subscription Clauses: This clause contains a statement by the subscribers that they are eager of forming themselves into a company and agree to have a number of shares written against their respective names. Anonymous 7-The memorandum and articles must comply with the Companies Acts 1963-2009, and must be printed in clear black print on durable paper 8-The correct statutes, e.g. 'Companies Acts 1963-2009', must be cited 9-If the company is a limited company and has not claimed the exemption under section 24(1) Companies Act 1963, as amended, the full name of the company followed by Limited or Public Limited Company as applicable, must be given; Abbreviations to Ltd, PLC are not acceptable. 10-The memorandum and articles must be signed by the subscribers, their addresses and descriptions must be stated and their signatures witnessed and dated. With the exception of guarantee companies, each subscriber must handwrite the number of shares he will take. Importance of Memorandum of Association: 1. A Company cannot be registered without filing this document 2. The limits or boundaries of the Company are determined by the memorandum. 3. Informs the object of the business. 4. Informs the name, address, and capital of the company. 5. The provisions of the document cannot be altered without adopting a special resolution. 6. Define the scope of company’s activities; 7. Defines relationship between company and out- siders 8. It is the constitution of the company. 9 It defines the limitation of the company’s operations 9. It contains clauses that give i important information about the Company Explain why Companies must have Memorandum of Association In other for a business to commence operations, it needs to have a memorandum of association which is a document which is prepared and sent to registrar office. Without this document a company cannot commence business. This document gives the firm's name, names of its members (shareholders) and number of shares held by them, and location of its registered office. It also states the firm's: (1) Objectives, (2) Amount of authorized share capital, (3) Whether liability of its members is limited by shares or by guaranty (4) What type of contracts the firm is allowed to enter into. Without this stated information in the memorandum of association, a limited company cannot exist or trade. Therefore its importance cannot be over emphasized. Did Private Companies need to register with company’s registrar office It is mandatory for private companies to register their companies with company’s registrar office.