Mercantile Law Notes.docx

A Memorandum of Association (MOA) is a legal document prepared in the formation and registration process of a limited liability company to define its relationship with shareholders. What is Memorandum of Association and its contents? Tags:

article,

capital,

company,

investment,

liability, memorandum,

shares.

Memorandum of association is a fundamental document. It is the charter of the company and defines its reason for existence. It regulates the external affairs of the company in relation to outsiders.

What is the importance of memorandum of association? It contains the fundamental conditions upon which alone the company can be incorporated. It is the charter of the company, which defines the objects of the company's formation and the utmost possible scope of its operations beyond which its actions cannot go. It determines the limits of a Company's activities.

What is the difference between articles of association and memorandum of association? Memorandum of Association is a document that contains all the fundamental information which are required for the incorporation of the company. Articles of Association is a document containing all the rules and regulations that governs the company. ... The articles can be drafted as per the choice of the company.

What is meant by memorandum of association? British A document that regulates a company's external activities and must be drawn up on the formation of a registered or incorporated company. ... The memorandum of association gives the company's name, names of its members (shareholders) and number of shares held by them, and location of its registered office.

The articles of association is a document that specifies the regulations for a company's operations and defines the company's purpose. The document lays out how tasks are to be accomplished within the organization, including the process for appointing directors and handling of financial records. What is the importance of articles of association? Importance of Articles of Association of a Company. It is the Articles of Association of a company or organization, which lays down all rules, provisions, regulations, powers, duties, rights, and responsibilities related with the overall governance and management of the company.

Are articles of association legally binding? Articles of association are rules governing the internal affairs of a company. All registered companies must have articles of association. ... Every company is required to have articles by law and the articles are legally binding on the company and all of its members.

What are the powers and duties of directors? DUTIES OF A DIRECTOR OR TRUSTEE 

Duties on Appointment as a Director or Trustee. ...



Duty to be Reasonable, Prudent and Judicious. ...



Duty to Carry Out the Charitable Purposes. ...



Duty to Avoid Conflict-of-Interest Situations. ...



Duty to Act Gratuitously. ...



Duty to Account. ...



Duty to Manage the Charity's Assets.

LEGAL POSITION OF DIRECTORS.

Directors are the persons duly appointed by the company to direct and manage the affairs of the company. Their legal position is sometimes described as agents, sometimes as managing partners, and sometimes as trustees.

Winding up of a company is defined as the condition when the life of the company is brought to an end. The properties of the company are administered for the profit of its members and its creditors. Steps of Winding Up The following steps are followed in the case of a company winding up − 

An administrator, usually denoted as a liquidator, is appointed in the context of liquefaction or winding up of a company.



The liquidator takes control over the company, assembles its assets, pays debts of the company and finally distributes any surplus amongst the members according to their rights and liabilities.



The company has no assets or liabilities at the end of liquefaction or winding up.



The dissolution of a company takes place when the assets and liabilities of a company are completely wound up.



On the context of winding up, the name of the company is stuck off from the list of companies and its identity as a separate legal person is lost.



If a company is unable to pay its debts or the debts taken by the company is worth more than the assets it owns and no agreements have been made with the creditors, then the company is considered insolvent and is subjected to compulsory liquidation or compulsory winding up.



The appointment of the liquidator is done either by calling a creditors’ meeting for the creditors to elect a liquidator by vote or by requesting the Secretary of the State to appoint one.



Insolvency Service, an agent of the government, is an investigating agency, which investigates the winding up of a company.



The procedure of winding up differs according to the registration status of the company, i.e., if the company is registered or if it is an unregistered company.



If the winding up of a company is processed in the court of law, the liquidator is termed as official liquidator.



The official liquidator acts through a recognized reporting system under the supervision of the court.

Powers of a Liquidator An administrator, usually denoted as a liquidator, is appointed in the context of liquefaction or winding up of a company. The liquidator takes control over the company, assembles its assets, pays debts of the company and finally distributes any surplus amongst the members according to their rights and liabilities.

What is pre incorporation contracts in company law? A pre-incorporation agreement is entered into by the corporate promoters, who form the company by filing its Articles of Incorporation. Since the corporation has not been formed yet, it cannot be a party to the agreement.

Is a company bound by pre incorporation contract? A pre-Incorporation contract is a contract that is entered into by a person who is acting on behalf of a company that does not exist. The person entering into the agreement has the intention that once the company comes into existence the company is to be bound by the provisions of the pre-incorporation contract.

Can a company ratify a pre incorporation contract? Promoters are generally held personally liable for pre-incorporation contract. If a company does not ratify or adopt a pre-incorporation contract under the Specific

Relief Act, then the common law principle would be applicable and the promoter will be liable for breach of contract.