Contents of the Memorandum

 Contents of the Memorandum
A memorandum of Association must contain the following clauses viz
1. Name Clause
In this clause the name of a company is mentioned to establish
its identity. It is the symbol of its existence. Undesirable name to be
avoided. It should not imitate another company’s name. If it is a public
limited company, it should end with the word ‘limited’. If it is a private
limited company, it should end with the word ‘private limited’.
2. Situation Clause
The State in which a company has its registered office is to be
stated here. Exact address within the State need not be given in this
clause. It determines the jurisdiction of the Registrar of Companies and
of the court.
3. Objects Clause
This is the most important clause as it states the activities of the
company. The objects lay down the maximum permitted range of ac-tivities. A company has the power to carry on only those types of
business which are included in this clause. Any action beyond the pow-ers of the company has no legal effect.
4. Liability Clause
This clause states that the liability of members is limited. In the
case of a company limited by guarantee, the amount each member
undertakes to contribute in the event of winding up, must also be
mentioned.
5. Capital Clause
The amount of share capital with which the company is to be
registered and its division into shares of fixed amount are also stated
here.
6.Association Clause or Subscription Clause
At least two persons in the case of a private limited company
and seven in the case of public limited company must sign the
memorandum and agree to take the number of shares shown against
their names. Further they also express their desire to form themselves
into a company in pursuance to the Memorandum of Association.