Memorandum of Association
A Memorandum of Association (MOA) is a legal document prepared in the formation and registration process of a limited liability company to define its relationship with shareholders.
It reveals what powers it has and what activities the company is permitted to undertake. Any act of the company outside the scope outlined in its memorandum is said to be ultra virus and is not binding on it. It is the constitution of the company in its relation to the outside world. It is a public document and any person dealing with the company is presumed to have sufficient knowledge of it. It is the primary document of a company.
The name clause requires to state the legal and recognized name of the company. The company name is allow to be registered if it does not bear any similarities with the name of an existing company. companies only.
The registered office clause requires to show the physical location of the registered office of the company. It is required to keep all the company registers in this office. The registered office should be established prior to commencing business activities.
The objective clause requires to summarize the main objectives for establishing the company with reference to the requirements for shareholding and use of financial resources. It is required to state the ancillary objectives; that is, those objectives that are required to facilitate the achievement of the main objectives. The objectives should be free of any provisions or declarations that contravene laws or public good.
The liability clause requires to state the extent to which shareholders of the company are liable to the debt obligations of the company in the event of the company dissolving. There are companies limited by shares and limited by guarantee.
The capital clause requires to state the company’s authorized share capital, the different categories of shares and the nominal value (the minimum value per share) of the shares. It is also required to list the company’s assets under this clause.
The association clause confirms that shareholders bound by the MOA are willingly associating and forming a company. It is required seven members to sign an MOA for a public company and not less than two people for a MOA of a private company. The sighing must be done in the presence of witness who must also append his signature.