3. Memorandum of Association
• First step in the formation of a company.
• Constitution of the company.
• Defines limitations of the powers of a
company.
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5. MEMORANDUM OF ASSOCIATION
OF
RELIANCE INDUSTRIES LIMITED
Name of the
company
RELIANCE INDUSTRIES LIMITED
Registered Office
Maharashtra
Object
To carry on the business of man made fibre products of all kinds.
Liability
Liability of members is limited
Capital
500,00,00,000 * 10 ( 500 crores equity share of rs. 10 each)
100,00,00,000 * 10 ( 100 crores equity share of rs. 10 each)
------------------------------------------------------------------------------600,00,00,000 * 10 = 60,00,00,00,000 (Rs. Six thousand croroes only )
Associations
There were 7 subscribers who initially hold the equity shares of the
company. For e.g.
(For detail see next slide )
Sr. No
(for details
www.ril.com/downloads/pdf/MOA.pdf
)
1
Name
Address
M.D.
36, Cunningham
SHIVNANJAPPA Road, Bangalore - 18
No. of
equity
share
Witness
500
C.V. SRINIVASA
MURTHY
6. OBJECTS
1. To carry on the business of all kinds of man made fibres by any process using
petrochemicals of all description or by using vegetable or mineral oils.
2. To carry on the business of manufacturers, dealers etc. of all types of petro-chemicals
like Naphta, Methane, Ethylene, Propylene, Butenes, Naphthalene etc. all other
petrochemical products and polymers in all their forms like resins, fibres, sheets
mouldings, castings etc.
3. To carry on the business of manufacturing, buying, selling, exchanging, converting,
Altering etc or using or advising users in the proper use of, cotton yarn, pure silk yarn
and such other fibre, fibres and fibrous materials, or allied products, by-products,
substances or substitutes for all or any of them, or yarn or yarns, for textile or other
use, as may be practicable.
4. To manufacture or help in the manufacturing of any spare parts, accessories, or
anything or things required and necessary for the above mentioned business.
NOTE : There are other objects incidental or ancillary to the attainment of main object. For
complete understanding kindly visit www.ril.com/downloads/pdf/MOA.pdf
8. • Alteration of name clause : By passing a “Special resolution” and
with the approval of Central govt. in writing.
• Alteration of registered office : By passing a Board’s resolution
and notifying the registrar within 30 days.
• Alteration of Object clause : Object clause can be altered under
some predefined circumstances.
• Alteration of liability clause : By adding a new “liability clause” in
case of changing liability from unlimited to limited.
• Alteration of capital clause : By passing an ordinary resolution,
provided it is authorized by article to do so.
9. Doctrine of Ultra Vires
•
•
•
•
•
Ultra means ‘beyond’
Vires means ‘the powers’
Ultra Vires means ‘beyond the powers’.
Its implication.
Rationale Behind Doctrine?
artificial person- no intelligence
Protect Shareholder interest.
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10. Effects of Ultra Vires
• Personal Liability of Directors
on the basis of fact not law
• Ultra Vires acquired property
Company’s property Secure
• Ultra vires contracts
Claim by third party void(example)
• Ultra vires lending
Borrower can be sued to recover money
• Ultra vires torts
Company not liable outside ambit of object.
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1) No approval is required for adding and deleting the word “private” ,in case of the conversion of a public company to private or vice versa.
2) Alteration required only when registered office shifted from one state to another.
3) No approval is required from Company Law Board.
4) Liability can be changed from limited to unlimited if each member has agreed via passing a resolution. A new clause need to be added in case of vice versa.
5) A company can alter the capital clause by passing a ordinary resolution provided it is authorized by its article to do so.