Class 11 Secretarial Practice Chapter 4: Documents Related to Formation of a Company

Key concepts: Documents Related to Formation of a Company

Memorandum of Association

Defined in Section 2(56). It is the charter of the company, states its purpose and powers, and limits what it can do.

Clauses of MoA

Name, registered office, objects, liability of members and capital clause.

Name clause

Should not be identical with an existing company, resemble a trade mark or suggest government support. Can be changed by a special resolution.

Table formats

The Act prescribes Tables A to E as formats for the Memorandum depending on the type of company.

Articles of Association

Internal rules and regulations for the management of the company.

MoA vs AoA

MoA defines external relationships and powers; AoA governs internal management and is subordinate to MoA.

Quick revision: important points

• MoA is a primary document; it is not easy to alter.
• MoA cannot contain anything contrary to the Companies Act.
• Prospectus invites the public to subscribe to shares or debentures.

Practice MCQs with answers

1. MoA is called the ___ of the company:

   1. Charter
   2. Diary
   3. Balance sheet
   4. Notice
   Show answer

   Answer: A. Charter
   It defines the limits of the company's powers.

2. Section 2(56) of the Companies Act, 2013 defines:

   1. Memorandum
   2. Prospectus
   3. Director
   4. Dividend
   Show answer

   Answer: A. Memorandum
   It defines the Memorandum of Association.

3. Name clause can be changed by passing a:

   1. Special resolution
   2. Simple bill
   3. Poll
   4. Casual note
   Show answer

   Answer: A. Special resolution
   A special resolution in a general meeting is needed.

4. Internal rules of a company are contained in:

   1. Articles of Association
   2. Memorandum only
   3. Prospectus
   4. Notice
   Show answer

   Answer: A. Articles of Association
   AoA regulates internal management.

5. Which of these is a clause in MoA?

   1. Objects clause
   2. Salary clause
   3. Lunch clause
   4. Holiday clause
   Show answer

   Answer: A. Objects clause
   MoA has name, registered office, objects, liability and capital clauses.

All Class 11 Secretarial Practice chapters

• Chapter 1: Secretary
• Chapter 2: Joint Stock Company
• Chapter 3: Formation of a Company
• Chapter 4: Documents Related to Formation of a Company
• Chapter 5: Members of a Company
• Chapter 6: Directors and Key Managerial Personnel
• Chapter 7: Company Meetings - I
• Chapter 8: Company Meetings - II (AGM and EGM)
• Chapter 9: Business Communication Skills of Secretary
• Chapter 10: Correspondence with Directors

Class 11 Secretarial Practice notes: all chapters