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Unit 5: Memorandum of Association

There is an accidental omission of the word ’limited’ [Dermatine Co. v. Ashworth (1905) Notes
21 T.L.R. 510]. In this case, a bill of exchange was accepted on behalf of a limited company.
The rubber stamp of the company was longer than the paper. As a result, the word ‘limited’
did not appear on the instrument. Held, the directors who accepted the bill of exchange
were not personally liable because omission was neither deliberate nor of negligent
origin. It was an obvious error of most trifling kind and the mischief aimed at by the Act
did not here exist.

5.2.3 The Registered Office Clause [s.13(1) (b)]

This clause states the name of the State in which the registered office of the company will be
situated. Every company must have registered office which establishes its domicile and it is also
the address at which company’s statutory books must normally be kept and to which notices and
all other communications can be sent. The notice of the exact situation (address) of the registered
office may be given to the Registrar within thirty days from the date of incorporation (s.146).
As in the case of publication of the company’s name, s.147 also makes similar provisions regarding
publication of the Registered Office of the company.

5.2.4 The Objects Clause [s.13 (1) (d)]

The objects clause defines the objects of the company and indicates the sphere of its activities.
A company cannot do anything beyond or outside its objects and any act done beyond them will
be ultra vires and void and cannot be ratified even by the assent of the whole body of shareholders.
However, a company may do anything which is incidental to and consequential upon the
objects specified and such act will not be ultra vires. Thus, a trading company has an implied
power to borrow money, draw and accept bills of exchange.

Task Advise Asiatic Government Security Life Assurance Co. Ltd. whether it can seek
injunction against the New Asiatic Insurance Co. Ltd. which was subsequently formed,
restraining it from having in its name the word ‘Asiatic’ on the ground that it has caused
confusion and can deceive the public. [Hint: Yes, it can seek injunction against the New
Asiatic Insurance Co. Ltd. The two companies are in insurance business, the impression
may be created that both of them are inter-related and the word ‘Asiatic’ is quite an
imaginary word and does not mean anything. Mere addition of the word ‘New’ is not
likely to give an otherwise impression. See s.20.]

Section 13, read along with Tables ‘B’, ‘C’, ‘D’ and ‘E’, in the act requires the company to divide
its objects clause into three parts:
1. Main objects of the company to be pursued by the company on its incorporation;

2. Objects incidental or ancillary to the attainment of the main objects; and
3. Other objects of the company not included in (a) and (b) above.
A company, may on receipt of certificate to commence business, pursue any business given in
the ‘main objects’. In the case of companies (other than trading companies) with objects not
confined to one State, the Memorandum must give the name of the State/(s) to whose’ territories
the objects extend’. No business given in ‘other objects’ can, however, be commenced unless
prior approval of shareholders with regard thereto is obtained by way of special resolution
passed in general meeting [s.149 (2A)]. Where special resolution is not passed, the Central
Government, may on an application made by the Board of directors, allow a company to

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