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प्रश्न
Distinguish between the following:
Memorandum of association and articles of association.
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उत्तर
Sr. No. |
Memorandum of association |
articles of association : |
|
1 |
Memorandum of Association is the primary, fundamental, and the main document of the company which lays down its constitution and defines its objects and the scope of its activities. |
The Articles of Association is a secondary, subsidiary, and subordinate document of the company which lays down the rules and regulations for the internal management of the company. |
|
2 |
It is the basic, fundamental, primary, and supreme document of the company. It is a life-giving document. |
It is a secondary and subordinate document. It is subordinate to the Memorandum of Association. |
|
3 |
It defines the sc0pe of the activities of the company, its objects, and their limits or the area beyond Which the activities of the company cannot go. It fixes the area of its operation. |
It lays down the rules for carrying out the objects of the company. The rules are meant for the internal management of the company within the area defined by the Memorandum. |
|
4 |
It defines the relationship of the company with the outsiders, e.g. buyers, sellers, creditors, debtors, etc. |
It defines the relationship between the company and members and also between members. It has nothing to do with the outsiders. |
|
5 |
Every company irrespective of its types, nature and size must prepare and file its own memorandum. No company under the Companies Act can be registered Without the Memorandum of Association. |
Every company must prepare and file its own articles. However, a public company may adopt table A of the Companies Act, 1956, as its articles. |
|
6 |
The procedure for the amendment or alteration Is very difficult. It requires an ordinary or special resolution, sanction by the Central Government or the Company Law Board or the Court. |
The procedure for alteration is relatively simple. The Articles can be altered subject to the Companies Act and general law provided the alterations are intra Vires the Memorandum and they are in the interest of the company as a whole. |
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संबंधित प्रश्न
Select the correct answer from the option given below and rewrite the sentence.
The ______ Clause describes the range of activities a company can undertake
Match the pairs:
| Group ‘A’ | Group ‘B’ |
| a) Capital clause | 1. Details of capital structure of a company |
| b) Liability clause | 2. Used for multiple issue of shares |
| c) Acts beyond the powers of Memorandum | 3. Abridged Prospectus |
| d) Red Herring Prospectus | 4. Describes main objectives |
| e) Shelf Prospectus | 5. Used for Rights Issue |
| 6. Incomplete Prospectus | |
| 7. Ultra Vires | |
| 8. Doctrine of Indoor management | |
| 9. Extent of liability of members | |
| 10. Articles of Association |
Write a word or a term or a phrase which can substitute the following statement:
Document which states the limits within which a company has to operate.
Write a word or a term or a phrase which can substitute the following statement:
Document which establishes company’s relationship with outsiders.
Write a word or a term or a phrase which can substitute the following statement:
Clause which gives details of authorized capital or Registered Capital.
Write a word or a term or a phrase which can substitute the following statement:
Document issued by public company inviting public to subscribe to its shares.
Write a word or a term or a phrase which can substitute the following statement:
Prospectus used for multiple issue of shares within a year.
Write a word or a term or a phrase which can substitute the following statement:
This prospectus does not contain information about the quantum of shares to be issued or the price at which shares will be issued.
State whether the following statement is True or False:
Prospectus must be issued within 1 year from the date of tiling it with the ROC.
State whether the following statement is True or False:
Every company has to issue shelf prospectus every time it offers shares to the public.
Complete the sentence.
The documents which state the aims and objectives of a company is called as_________
Complete the sentence.
Any act done by the company which goes beyond the powers of Memorandum of Association will be calledas _________
Complete the sentence.
The document issued by a company to invite investors to buy its securities is called as _________
Select the correct option from the given options:
| Group A | Group B |
| Liability clause | ___________ |
Explain the following term/concept.
objective clause
Study the following case/situation and express your opinion:
A public limited company has issued all the shares mentioned in its Memorandum as Authorized Capital. Now the Company wants to make a public issue of 10,000 shares at face value of Rs 100 per share, to raise more funds for its expansion activities :
(a) Which clause of Memorandum needs to be altered?
(b) In which meeting the alteration can be approved?
(c) Which document should the company issue to invite the public to buy its shares?
Study the following case/situation and express your opinion:
A company stated in its prospectus that it has been making profits since the last 5 years. However, Mr. X. an investor found out that two years back the company had not made any profit. The prospectus was filed with the ROC on 1 st Jan 2017 and was issued to the public on 10th Feb 2018.
a) Can Mr. X state that there was a misstatement in the prospectus?
b) If found guilty which two types of liability will the company and its officers face?
c) Can the prospectus be valid for issue to the public on 10th Feb 2018?
Study the following case/situation and express your opinion:
A Company plans to offer Rights Issue.
a) Which document must it send to its shareholders for offering the Rights Issue?
b) Instead of Rights Issue, if the company wants to issue shares to the public, which document must it issue for inviting the public to subscribe for it?
c) Name the document which is called as incomplete prospectus.
