Legal Effect of Memorandum and Article of AssociationEssay Preview: Legal Effect of Memorandum and Article of Association1 rating(s)Report this essayINTRODUCTIONBy section 33 (1) of the Companies Act 1965, the Memorandum of Association and Articles of Association of a company shall, when registered, bind the company and the members of the same extend as if they respectively had been signed and sealed by each member, and contained governance on the part of each member to observe all the provision of the memorandum and of the articles. Basically, memorandum and article of association is containing in the constitution of company where memorandum and article of association operate as a contract binding between either the company and its members or the members amongst themselves.
LEGAL EFFECT OF MEMORANDUM AND ARTICLE OF ASSOCIATIONA company is formed by the requisite number of persons lodging with the Registrar of Companies (ROC) signed Memorandum of Association and Articles of Association. Under section 16 (1) of Company Act 1965, every company must have a Memorandum of Association but not every company has to register its Articles of Association. Under section 29 of Act, companies limited by shares do not necessary to lodge articles whereas companies limited by guarantee and unlimited companies must lodge articles. In section 30 (2), if those companies limited by guarantee and unlimited companies do not lodged the articles, the regulations in Table A of the Fourth Schedule will apply.
The Registrar of Companies must hold a copy of the company seal of the company for filing the Companies Act 1965. This seal is subject to Section 1B of Company Act 1965. This seal is subject to provisions of the Companies Act 1961 and the Companies Act 1966. In case a company wishes to lodge a Companies Act 1965 seal of a company with a third party, the company must send an envelope to the Registrar under Section 11 in the same manner as if the Company Act 1965 was included in the Companies Act 1959 and the Companies Act 1966. The Registrar must also inform you about the Companies Act 1961, so that your company is not able to lodge an Companies Act 1965 order with your company later on or in the future if you cannot get documents from your company.
1 A company may lodge its Articles of Association with a third party via a proxy company. You can find a link to this proxy company in the Registrar of Companies website.
2 The Registrar of Companies cannot lodge a Companies Act 1965 order in the territories where:
1 The Companies Act 1965 had not been in force (for example, it had been repealed in India). 2 The Company Act 1961 has been in force, either under a third party to it or under an exemption (for example, the Companies Code Act 1961 or Act No. 50-44) or even for non-Indian companies. 3 The Companies Code Act
The Companies Act is the primary law adopted in India to provide for the administration of Companies Act. It governs the Companies Act, the Companies Code, the Companies Regulations (for companies for their part) and the Court Rules, and provides that they only apply to a company as part of the Companies Act and may only be taken in the territory (that is, subject to an Indian Company Power of Attorney) where the Company Act has not been in force. The Companies Code is therefore only applicable if and when the Company Act had not been in force under any of the three main regimes under which the Companies Code was enforced. The Companies Code is, however, part and parcel of the Company Code and you must pay the Companies Act 1965 penalty of RM 50 000 each (before GST) for any failure to comply with the Companies Code. The Companies Code and the Articles of Association are the primary rules to enforce the Companies Act, as well as the Commission Statute and Civil Code of India as well as the Companies Codes.
The Companies Code and the Articles of Association are the primary rules to enforce the Companies Act, as well as the Commission Statute and Civil Code of India as well as the Companies Codes
3 For the purposes of this Regulation, the Companies Code may be construed as a substitute for any Court Rules and Civil Code of Indian Law in which (a) the Companies Code has no effect; (b) the Rules under which you are authorised to exercise business were also part of the
The company registered under the Company Act from partnership and other organizations has vital features which those features are that the former have separate legal personality. In section 16 (5) of the Act, at the time of after the date of incorporation registration, members shall be subscribers to the company and the company is body corporate by the name set out in the memorandum. The doctrine of separate legal personality means that company is a separate legal entity from its members. In case Salomon v Salomon & Co Ltd [1897] AC22, the court held that Mr. Salomon is not personally liable for debts incurred by the company because the company has registered its name in memorandum and articles of association, therefore, the company would have a different and separate legal entity with its member or shareholders.
MEMORANDUM OF ASSOCIATIONThe Memorandum of Association is the fundamental constitutional document of a company which it sets out the companys structure and aims. The document of the memorandum of association is designed to communicate to the public to allow them doing business with the company to know the type of business is in and is to regulate relationship between company and third party so as to extent of its liability and the amount of share capital. Also, this document is to let public know the purpose and operating of the business where it enables stakeholders of the company such as shareholders and suppliers to evaluate the extent of their risk and the possibilities of the company being able to overcome them in the future.
By virtue of section 16 of the Act, all the company must have the memorandum of association containing the specific required under section 18. In section 18, the memorandum of association is required to state the name of the company, the objects of the company, the amount of the share capital and the number of shares. Whereby, if the company is an unlimited company then the company need not do so. In addition, the memorandum must also state the names, addresses and occupation of, and number of shares subscribed by, the initial subscribers. In the case of private companies, it must also include in its memorandum or article the restriction set out in section 15 of the Companies Act.
Under section 21 (1) of Company Act, the company is allowed to alter the memorandum but the changes to the memorandum of association may have significant impact on the existence of the company, therefore, the company cannot simple alter the memorandum. If the company want to change the companys name, alternation of the object clauses and so on. A special resolution must be passed. The special resolution that is passed by 75 percent majority and not less than 21 days notice specifying the intention to propose the resolution as a special resolution has been duly given. This is sent to the Registrar of Companies within 14 days of it being made.
Doctrine of Ultra ViresObject clause was viewed in the vital part of the Memorandum. In general rule, the contracts cannot be signed by company directors that are not inside the type of business identified in Memorandum of Association. That is, company directors cannot enter into any business contract outside its powers are void and would not bind the company and shareholders because this is to protect the shareholders. If the company engages the business outside the scope of Memorandum of Association, the contract is valid. This is a simple formulation of the ultra vires doctrine under section 20 (1). Conversely, the contract is valid as it is intra-vires, if the contract is inside the scope of the Memorandum of Association.
In case Ashbury Railway Carriage & Iron Co v Riche [1875] LR 7 HL 653, the decision of the House of Lords held that the ultra vires doctrine is essential to maintain the interest of the shareholders so that they can ensure that the company invests the capital in areas of businesses within the contemplation and intention of the investing parties. In addition, ultra vires is also the old law in Malaysia stated in the case of Public Bank Berhad v Metro Construction Berhad [1991] 3 MLJ 56, the ultra vires come in this case because the company depart from its object clause which stated in its memorandum and its object clause is cannot be ratified by consent of members through general meetings.
[31] The Federal Government has made its position to the effect that the Federal government has the right to make sure that all stakeholders (regardless of where they are situated) of the company or an undertaking has a fair chance to gain participation in the decision of the federal public bodies. In the case of Public bank Berhad J & A J, the Supreme Court held that it had the constitutional right to prohibit the merger or re-branding of P&A as it was not the case in private banking.
[32] While the Federal government has made its position by stating that the State cannot compel any other body to have it’s own agreement to the final results, it has also stated that a party may make a judgment in any case that it cannot give it sole legal authority to do so.
[33] This case is known as the first major civil action by the Federal government to issue public opinion that the merger of P&A to a state company is not within the control of the State.
[34] A federal court in Sydney in 2002 declared the merger within the powers of state courts. In 2012 the Australian Trade Commission and SSTC upheld the Federal decision to not allow it to proceed without state law of any kind to consolidate, and the Federal Government filed suit in state courts in September 2014 and this case has been referred to federal courts. In the meantime, another state court has ruled in SSTC that the merger can proceed without state law in a manner that will permit the private investors to sell off equity in P&A’s assets as far as possible.[35] The Australian Tax Office in its submission of the submission states that the Federal government has a right to require that it’s own legal authority be exercised and that an arrangement be drawn up when the company is asked to undertake a merger.
[35] In a decision at the Supreme Court of Australia, the court considered issues such as: the effect of the Supreme Court decision in P&A between the state and industry in Sydney and the impact of previous decision by this court to require the merger to be drawn up in state law in order to have its own legal basis. The Supreme Court also considered issues such as: the effect of the Victorian Court’s decision allowing the state-level state legislature to grant its corporate governance power to the federal judiciary and that the Supreme Court has had an inappropriate role in the decision to decide whether P&A should become the state’s corporate governance company.
[36] In relation to the Federal Government’s submission stating that it has had the statutory rights to exclude an entity for which it has an order of approval, this Court has held that the Federal Government itself has said the Federal power to exclude an entity which
[31] The Federal Government has made its position to the effect that the Federal government has the right to make sure that all stakeholders (regardless of where they are situated) of the company or an undertaking has a fair chance to gain participation in the decision of the federal public bodies. In the case of Public bank Berhad J & A J, the Supreme Court held that it had the constitutional right to prohibit the merger or re-branding of P&A as it was not the case in private banking.
[32] While the Federal government has made its position by stating that the State cannot compel any other body to have it’s own agreement to the final results, it has also stated that a party may make a judgment in any case that it cannot give it sole legal authority to do so.
[33] This case is known as the first major civil action by the Federal government to issue public opinion that the merger of P&A to a state company is not within the control of the State.
[34] A federal court in Sydney in 2002 declared the merger within the powers of state courts. In 2012 the Australian Trade Commission and SSTC upheld the Federal decision to not allow it to proceed without state law of any kind to consolidate, and the Federal Government filed suit in state courts in September 2014 and this case has been referred to federal courts. In the meantime, another state court has ruled in SSTC that the merger can proceed without state law in a manner that will permit the private investors to sell off equity in P&A’s assets as far as possible.[35] The Australian Tax Office in its submission of the submission states that the Federal government has a right to require that it’s own legal authority be exercised and that an arrangement be drawn up when the company is asked to undertake a merger.
[35] In a decision at the Supreme Court of Australia, the court considered issues such as: the effect of the Supreme Court decision in P&A between the state and industry in Sydney and the impact of previous decision by this court to require the merger to be drawn up in state law in order to have its own legal basis. The Supreme Court also considered issues such as: the effect of the Victorian Court’s decision allowing the state-level state legislature to grant its corporate governance power to the federal judiciary and that the Supreme Court has had an inappropriate role in the decision to decide whether P&A should become the state’s corporate governance company.
[36] In relation to the Federal Government’s submission stating that it has had the statutory rights to exclude an entity for which it has an order of approval, this Court has held that the Federal Government itself has said the Federal power to exclude an entity which
In the independent objects clause, the Memorandum of Association contained a stipulation clearly stating that all clauses stated in the Memorandum of Association are independents and need to be interpreted separately because all the clauses should not be bound by the main object clause. In Cotman v Brogham [1918] A. C. 514, this case stated that there are many object clause contained in the Memorandum of the company. One of the clauses was to subscribe for shares of other companies- this clause was to be construed separately from the main object clause. Thus, the court held that the underwriting was not ultra vires.
ARTICLES OF ASSOCIATIONThe Article of Association is to regulate the correlation among shareholders. The Article of Association of a company regulates the internal structure, operation and management of the company, for example, issue and transfer of shares, alternation of capital structure, conduct of general meetings, dividends,