A company memorandum of association defines how a company is limited in the business it can legally undertake. Memorandum of association sets out the relationship between company and outside world and must state at least 3 things : -
1. Company Name.
2. Situation of registered office.
3. Objects of the company.
Company Name
The company must state its name and be registered as a company. Usually the name ends with co. or company.
Situation of registered office
If the company has a share capital amount of capital and number of shareholder. Nominal value of shares in to which it is divided must be enclosed. This is called the Capital clause.
Objects of the company
The object clause is of considerable importance as it tells the prospective members what type of business they are investing in and tells persons intending to deal with the company what are its objects, power and what if any are its limitations.
If company through its directors undertakes transactions not within its powers as defined, that transaction is described as ultra vires and is void. Company cannot be held liable for ultra vires acts carried out by its members. Object clause is usually drafted very widely to enable company to do almost anything they wish.
2. Situation of registered office.
3. Objects of the company.
Company Name
The company must state its name and be registered as a company. Usually the name ends with co. or company.
Situation of registered office
If the company has a share capital amount of capital and number of shareholder. Nominal value of shares in to which it is divided must be enclosed. This is called the Capital clause.
Objects of the company
The object clause is of considerable importance as it tells the prospective members what type of business they are investing in and tells persons intending to deal with the company what are its objects, power and what if any are its limitations.
If company through its directors undertakes transactions not within its powers as defined, that transaction is described as ultra vires and is void. Company cannot be held liable for ultra vires acts carried out by its members. Object clause is usually drafted very widely to enable company to do almost anything they wish.
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