A Memorandum of Association (MoA) represents the charter of the company. It is a legal document prepared during the formation and registration process of a company to define its relationship with shareholders and it specifies the objectives for which the company has been formed. The company can undertake only those activities that are mentioned in the Memorandum of Association. As such, the MoA lays down the boundary beyond which the actions of the company cannot go.
Memorandum of Association helps the shareholders, creditors and any other person dealing with the company to know the basic rights and powers of the company. Also, the contents of the MoA help the prospective shareholders in taking the right decision while thinking of investing in the company.
The format of a MoA is specified in Table A to Table E depending upon the type of company. A company can adopt the table applicable to it; for instance, Table A is for a company limited by shares, and Table B is for a company limited by guarantee and having share capital etc.
Memorandum of Association (MoA) consists of the following clauses :
i. Main Objective: It states the main business of the company
ii. Incidental Objective: These are the objects ancillary to the attainment of main objects of the company
iii. Other objectives: Any other objects which the company may pursue and are not covered in above (a) and (b)