The memorandum of association (MOA) is one of the most important documents required to incorporate a company. It outlines the key terms governing a company like its name, registered office, objectives, share capital structure, and liability of its members. The MOA of Reliance Industries Limited is presented as an example, listing its name, registered office in Maharashtra, objectives, share capital of Rs. 6,000 crores divided into shares of Rs. 10 each, and its initial subscribers. In 2014, the Supreme Court issued a non-bailable warrant for the arrest of Sahara India Pariwar Chairman Subrata Roy for failing to refund over Rs. 20,000 crores collected from investors through optionally convertible
1. Corporate Law
Memorandum of Association
Submitted To: Submitted By:
Dr. Deepika Tomar Akshara Talegaonkar
Mitika Ghorpade
Adarsh Jain
Anumeet Sandhu
Gagandeep Singh
B Com(H) III Sem, Sec ‘A’
3. What is MOA..?
• The memorandum of association of company is
one of the most important documents and must be
drafted with care.
• It has to be filed with the Registrar of Companies
during the process of Incorporation of a Company.
• It contains the fundamental conditions upon which
the company is allowed to operate.
• It is the document that governs the relationship
between the company and the outside.
4. Memorandum of Association
• “The purpose of Memorandum of Association
is to enable the share holders, creditors and
those who deal with the company to know
what its permitted range of enterprise is.”
- Lord Macmillan
5. Clauses of MOA
1. Name Clause: – Under this clause name of company is
stated, as approved by MCA.
2. Registered Office Clause: – The memorandum must
mention the state in which registered office of the
company is situated. Complete address of the company
need not required to mention here.
3. The Object Clause: – This is the most important clause.
Company is free to choose any object which is
not illegal. This clause is divided in two parts that is a)
Main Object and b)The objects which are necessary for
furtherance of the object specified in clause 3(a)
6. Cont.
4. Liability Clause: – Liability clause states that the
liability of the member is limited to the extent of amount
unpaid on shares.
5. Capital clause: – Limited company having share capital
must state the amount of its share capital and division
thereof into shares of fixed denominations in its
capital clause.
6. Subscription Clause: – The memorandum has to be
signed by each subscriber in presence of at least one
witness. Each subscriber must written number of
shares he shall take. At least one share should be
taken by each subscriber.
7. MOA OF RELIANCE INDUSTRIES LIMITED
Name of the
company
RELIANCE INDUSTRIES LIMITED
Registered Office Maharashtra
Object To carry on the business of man made fibre products of all kinds.
(For detail see next slide )
Liability Liability of members is limited
Capital 500,00,00,000 * 10 ( 500 crores equity share of rs. 10 each)
100,00,00,000 * 10 ( 100 crores equity share of rs. 10 each)
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600,00,00,000 * 10 = 60,00,00,00,000 (Rs. Six thousand croroes only )
Associations
(for details
www.ril.com/downloads/pdf
/MOA.pdf )
There were 7 subscribers who initially hold the equity shares of the company.
For e.g.
Sr. No Name Address No. of
equity
share
Witness
1 M.D.
SHIVNANJAPP
A
36, Cunningham
Road, Bangalore - 18
500 C.V.
SRINIVASA
MURTHY
8.
9. • On February 26, 2014, shock waves were felt through
the country as the Supreme Court of India sanctioned a
non- bailable warrant for the arrest of Sahara India
Pariwar Chairman Subrata Roy, for his repeat failure to
refund over Rs. 20,000cr. plus interest @15% to its
millions of small investors.
• Since 2009, when the Sahara Group’s activities first
came under the radar of SEBI leading up to the arrest of
Sahara India Pariwar founder Subrata Roy in 2014, both
parties have been engaged in an aggressive regulatory
conflict. SEBI alleged that Sahara India Real Estate Corp
Ltd and Sahara Housing Investment Corp Ltd, which
issued Optional Fully Convertible Debentures, illegally
collected investor money. Meanwhile, Sahara denied
SEBI had any jurisdiction in the matter.
10. • SEBI went on to order Sahara to issue a full refund to its
investors, which was challenged by Sahara before the
Securities Appellate Tribunal (SAT). When the SAT
upheld SEBI’s order, Sahara moved to the Supreme
Court in August 2012, which ordered Sahara to refund
investors’ money by depositing it with SEBI. Sahara then
declared that most of the US $3.9 billion had already
been repaid to investors, save for a paltry US $840
million, which it handed over to SEBI. This was disputed
by SEBI, which claimed that the details of the investors
who were refunded had not been provided. When
Sahara failed to deposit the remaining money with SEBI
and Subrata Roy skipped his hearing, the Supreme
Court of India issued an arrest warrant for the Sahara
chief in February 2014.
12. • Investors did not complain simply because
they were getting the promised return on
their investments. In fact till date some
loyal depositors are happy to invest in
Sahara schemes offering 10%+ annual
return or up to 50% return in 48 months–
or an equity interest in the company
whichever they would choose at the end of
the period.
14. • The money collected was not being
invested anywhere. There were no assets
backing the deposits. This made the whole
issue kind of like a ponzi scheme in that so
long as the company keeps raising more
money it can keep servicing previous
interest payments and principal upon
maturity.
15. • The case captured the headlines once again in March 2015
when the SC redirected SIRECL and SHICL to refund the
amount of Rs. 24,000 crores along with the interest from the
month of August 2012 till 2015 and which collectively amount
to Rs. 40,000 crores. Thus, in July 2015, SEBI had also
cancelled Sahara’s mutual fund license.
• ‘Investor fraud’ leads to loss of trust as the concept of
investment is entirely based on ‘trust’. When conglomerates
like Sahara indulge in investor fraud, they are not just toying
with international economic trust and playing on their
investors, but deceive their own employees and consumers
as well. The implication of investor fraud falls on the entire
society and is detrimental to development. Sahara may have
learnt its lesson but its actions jolted the entire nation.
