In case of a company having a share capital unless the company is an unlimited company Memorandum shall also state the amount of share capital with which the company is to be registered and division thereof into shares of a fixed amount . The capital with which the company is registered is called the authorized or nominal share capital. The nominal capital is divided into classes of shares and their values are mentioned in the clause, the amount of nominal or authorized capital of the company. In case of companies limited by guarantee, the amount promised by each member to be contributed by them in case of the winding up of the company is to be mentioned. No subscribers to the Memorandum shall take less than one share. Each subscriber of the Memorandum shall write against his name the number of shares he takes.
The liability of the members is limited to the extent of the shares subscribed by the members if the company is formed with share capital or to the extent of the guarantee given by the members if the company is formed with guarantee.
The Memorandum of a company limited by shares or by guarantee shall state that the liability of its members is limited. This mean that no member can be called upon to pay anything more than the nominal value of the shares held by him or so much thereof as remains unpaid. If shares are fully paid up then his liability is nil. The Memorandum of a company limited by guarantee shall also state that each member undertakes to contribute to the assets of the company in the event of it being wound up while he is a member or within one year after he ceases to be a member , for (1) payment of the debts and liabilities of the company or (2) of such debts and liabilities of the company as may have been contracted before he ceases to be a member and (3) of the costs charges and expenses of winding up, and (4) for adjustment of the rights of the contributories among themselves such amount as may be required not exceeding a specified amount.
Subscription or Association clauses:
Each subscriber to the Memorandum of the company shall take at least one share. In case of a private company at least 2 persons and in case of a public company at least 7 persons shall subscribe to the Memorandum of the company. The signature of the subscribers shall be attested by at least one witness.
The association clause shall be in the following form:
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 take the number of shares in the capital of the company set opposite our respective names.
After incorporation no subscriber can withdraw his name on any ground whatsoever.
After the above clause, the name, age, address description and occupation of each subscriber is mentioned.
Forms of Memorandum of Association:
The Memorandum of Association of a company shall be in any one of the forms in Table B, C, D and E in Schedule I as may be applicable to the company or in a form as near thereto as circumstances admit.
Table B: Contains memorandum of association of a company limited by shares.
Table C: Contains memorandum of association of company limited by guarantee and not having a share capital.
Table D: Contains memorandum of association of a company limited by guarantee and having a share capital.
Table E: Contains memorandum of association of an unlimited company
The Memorandum shall be printed be divided into paragraphs numbered consecutively and be signed by each subscriber (who shall add his address, description, and occupation if any) in the presence of at least one witness who shall attest the signature and shall likewise add his address, description and occupation if any.
Source: Finance Management