members to the amount unpaid on the shares owned by them. For example, if a shareholder has purchased shares of Rs. each and has already paid Rs. per share, his/her liability is limited to Rs.
per share. Thus, even in the worst case, he/she may be called upon to pay Rs. , only. (v) Capital clause: This clause specifies the maximum capital which the company will be authorised to raise through the issue of shares.
The authorised share capital of the proposed company along with its division into the number of shares having a fixed face value is specified in this clause. For example, the authorised share capital of the company may be Rs. with divided into . lakh shares of Rs.
each. The said company cannot issue share capital in excess of the amount mentioned in this clause. (vi) Association clause: In this clause, the signatories to the Memorandum of Association state their intention to be associated with the company and also give their consent to purchase qualification shares. The Memorandum of Association must be signed by at least seven persons in case of a public company and by two persons in case of a private company.
A copy of a Memorandum of Association is given at the end of the chapter. B. Articles of Association: Articles of Association are the rules regarding internal management of a company. These rules are subsidiary to the Memorandum of Association and hence, should not contradict or exceed anything stated in the Memorandum of Association.
A public limited company may adopt Table A which is a model set of articles given in the Companies Act. Table A is a document containing rules and regulations for the internal management of a company. If a company adopts Table A, there is no need to prepare separate Articles of Association. For companies not Association Clause The association clause reads as under: “We, the several persons whose names and addresses are subscribed, are desirous of being formed into a company in pursuance of this Memorandum of Association, and we respectively agree to