Page 234 - DMGT407Corporate and Business Laws

Unit 9: Memorandum of Association

(iii) One state to another state. Notes
6. Describe the circumstances under which the alteration of objects clause is permissible.
Also describe the formalities to be complied with for changing the objects clause. [Para
6.4]
7. How are alterations made in a memorandum of association?
8. Write explanatory notes on:

(i) Doctrine of ultra vires and its implications.
(ii) Change of name clause.
9. M/s XYZ Ltd., a company having its registered office at Mumbai (Maharashtra State),
desires to shift its registered office to Pune (Maharashtra State). Describe the procedure
applicable in this case under the Companies Act, 1956.
10. The main object of a company is to manufacture cement. Seeing the potential for new
business the board of directors decided to go in for manufacture of steel and steel related
products. These are included in the ‘other objects’ of the company. Can the company
undertake the aforesaid new business?
11. 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.
12. The directors of a company registered and incorporated in the name ‘Mars Textile India
Ltd.’ desire to change the name of the company entitled ‘National Textiles and Industries
Ltd.’
Advise as to what procedure is required to be followed under the Companies Act, 1956.
13. The directors of a company borrow ` 50,000 from A on a transaction which is ultra vires
the company. Discuss the rights of A against the company and its directors. [Hint: A can
hold directors personally liable. The company can be held liable only if the money has
been used to pay ultra vires debts of the company or in case any assets have been purchased
for the company, these may be attached. Also see Para 6.3]

14. The objects clause of the memorandum of XYZ Pvt. Ltd. New Delhi authorised to do
trading in mangoes. The company, however entered into partnership with Mr. A and
traded in mangoes and incurred liabilities to Mr. A. The company, subsequently, refused
to admit the liability to A on the ground that trading in mangoes was ultra vires the
company. Advise, whether stand of the company is legally valid and if so, give reasons in
support of your answer.
15. ABC Ltd., wishes to shift their registered office from Nehru Place, New Delhi to a new
premises at 81, Kasturba Gandhi Marg, New Delhi. State the procedure.

Answers: Self Assessment

1. True 2. True
3. False 4. True
5. True 6. False

7. False 8. False
9. True 10. True

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