Association Clause of Memorandum of Association
A company’s memorandum of association, often simply called the “Memorandum”, is the document that governs relations between the company and the outside world. It serves as the constitution of the company. It is a public document and may be inspected by anyone, usually at the public office where it is lodged. The structure and formulation of Joint Stock Company are made on the basis of the memorandum of association.
Association clause: This clause states that the persons subscribing their signatures at the end of the Memorandum are desirous of forming themselves into an association in pursuance of the Memorandum. 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 must be signed by at least seven persons in the cause of public limited company and by at least two persons in the case of private limited company.
Relating to this clause, Companies Act describes the regulations is as follows:
(a) Every member who put down signature in the memorandum has to buy minimum one share. [Section: 6 (3)]
(b) It is mandatory to write down the number of shares besides the signature and the name of each member.
(c) The members who put down signature must put a signature in front of minimum two witnesses and the witnesses also attest the signature.
Above all the company has to mention the provisional terms and conditions of the respective clauses. It needs a general or special decision or sometimes gets permission from the court or from the Government to change any terms.