Importance of Memorandum of Association.
The Memorandum of Association of a company is very significant and vital document of a company. The importance of Memorandum of Association are:
Basis for the Company:
Memorandum of Association is a basis of the company. A company cannot be registered without this document. It is the foundation upon which the structures of the company is based.
Determines the scope of company:
It lays down the scope of activities of a company beyond which the company cannot go.
Source of company’s powers:
Memorandum of Association is the source of company’s power. Although, memorandum does not state the power of the company but it empowers the company to do everything within its scope.
Guide to the directors:
It serves as a guide to the directors of the company. It gives them to work for achieving the objects of the company and restraints them from doing anything beyond the scope of memorandum.
The procedure of Alteration in Name Clause in Memorandum.
A company being a separate legal entity must have a name which does not resemble the name of any other company and should not be objectional in the opinion of the government. The provisions or conditions of the Memorandum relating to the name clause is provided t in section 4 of the companies Act and can be altered by following the prescribed procedure laid down in the Act.
The provisions relating to alteration of name clause are as follows:
Change within the local limits of the small town: A special resolution required to be passed for any change in the registered office. No company shall change the place of its registered office from jurisdiction to the jurisdiction of another registrar within the same state, a special resolution has to be passed in the general meeting of the company.
Change from one city to another within the same state: If the registered office is to be shifted from one city to another city, town or village within the same state, a special resolution has to be passed in the general meeting of the company.
Change within the same state from the jurisdiction of one registrar of companies to the jurisdiction of another registrar of companies: The confirmation by the regional directors will be necessary for changing registered office of a company from one place to another if the change of registered office from the jurisdiction of one registered to the jurisdiction of another within the same date.