Page 77 - DCOM106_COMPANY_LAW

Company Law

Notes 5.5 Summary

The memorandum serves a two-fold purpose. It enables shareholders, creditors and all
those who deal with the company to know what its powers are and what is the range of its
activities.
Section 15 requires the memorandum to be printed, divided into paragraphs, numbered
consecutively, and signed by at least seven persons (two in the case of a private company)
in the presence of at least one witness, who will attest the signature.

The objects of the company must not be illegal, immoral or opposed to public policy or in
contravention of the Act.
The change of name must be communicated to the Registrar of Companies within 30 days
of the change.
Section 17 provides for the shift of the registered office from one State to another and such
shift involves alteration of memorandum.

5.6 Keywords

Liability Clause: Liability clause states the nature of liability of the members.
Memorandum of Association: The Memorandum of Association of a company is its charter
which contains the fundamental conditions upon which alone the company can be incorporated.

The Capital Clause: Capital clause states the amount of share capital with which the company is
registered and the mode of its division into shares of fixed value, i.e., the number of shares into
which the capital is divided and the amount of each share.
The Object Clause: The objects clause defines the objects of the company and indicates the sphere
of it activities.
5.7 Review Questions

1. Explain memorandum of association and state its contents.
2. State the rule laid down in ‘Ashbury Railway Carriage Co. vs. Riche’s case.
3. Discuss the legal significance of the different clauses in the memorandum of association.
4. Describe the circumstances under which the alteration of objects clause is permissible.

5. Describe the formalities to be complied with for changing the objects clause.
6. How are alterations made in a memorandum of association?
7. Write explanatory notes on “Doctrine of ultra vires and its implications”.

8. Write explanatory notes on “Change of name clause”.
9. Describe the steps to be taken by a company to effect changes in the location of its registered
office from:

(a) One place to another place in the same city;
(b) One city to another city in the same state;
(c) One state to another state.

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