What is the importance of the objects clause of the Memorandum of Association?

The object clause of Memorandum of Association states the purpose of incorporation of the company. This is an important clause since any company performing an act beyond the objects makes it ultra vires. The subscribers of the company decide its objects while incorporating it.

Which is the most important clause of Memorandum of Association?

Main Clauses of Memorandum of Association

• Name Clause. A legal entity, as obvious as it may be, must have a name, which forms the identity of the enterprise.
• Domicile Clause.
• Objects Clause.
• Liability Clause.
• Capital Clause.
• Subscription Clause.

What is an object clause of a company?

The objects clause states the ambit and extent of a Company’s powers. The purpose of this statement is to enable creditors and other persons dealing with the company to know the extent of the company’s power and authority, and to protect the subscribers who will know the purposes to which their money can be applied.

What is the importance of object clause?

The objects clause, also called the objective clause, is considered the most important in the MOA. It defines and limits the scope of the company’s operations. It details the company’s scope of activity for the members and explains how the members’ capital will be used.

What does object of Memorandum mean?

The Memorandum of Association is the document that contains the fundamental conditions upon which a company is allowed to operate. The most important clause is the object of the company. This clause states the nature of business of the company.

What is an object of memorandum?

Object of registering a Memorandum of Association or MOA The MOA of a company contains the object for which the company is formed. It identifies the scope of its operations and determines the boundaries it cannot cross. It contains details about the powers and rights of the company.

What is memorandum of association explain the law relating to the alteration of object clause?

Whenever a company is incorporated it shall prepare an MOA (Memorandum of Association). It is the very First step for company incorporation as it defines the area within which the company can operate during its existence.

What is memorandum of association explain the law relating to alteration of object clause and name clause?

The object clause of the Company is the third clause of memorandum of association of any Company stating the objects i.e. the business/purpose for which the Company is incorporated and any other matter considered necessary in furtherance thereof.

What is an object of Memorandum?

Under which circumstances can the object clause of a Memorandum be changed?

Alteration of Objects Clause in Memorandum of Association A company can alter is objects clause by passing a special resolution. Alteration of objects clause can be done for the following reasons: 1. For the purpose of carrying on its business more economically and efficiently.