Main Documents | Memorandum and Articles of Association | Prospectus

 

3 Main Documents of a Limited Company

A number of documents should be prepared and presented to the company registrar for the formation of a company. However, the following documents are essential:

 

For a private limited company ·          Memorandum of Association ·          Articles of Association

For a public limited company ·          Memorandum of Association ·          Articles of Association ·          Prospectus

 

 

Memorandum of Association

It is the main document of a company.

As the main law of country is constitution so as Memorandum of Association is the main law of a company.

The document, which defines its objectives, powers and its relationship with the outside world, is called Memorandum of Association.

The company works according to the memorandum.

The Memorandum of Association includes:

·          The name of the company.

·          The name of the place where the company has registered office is situated.

·          Present and future objectives of the company.

·          The liability clause of shareholders.

·          The authorized share capital of the company in amount.

·          Other necessary documents etc.

  

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Articles of Association

The document, which defines the rights, powers and duties of the managements called the Articles of Association.

It shows the relation between the company and its members as well as the relation among the members.

The Articles of Association includes:

Number of directors and their terms and conditions.

The amount of minimum subscription by directors.

Company’s meeting calling procedure.

Director’s remuneration and allowance.

Rights and duties of the managing director.

Provisions relating to the rules and regulations of internal management.

Different types of shares and its right.

Called up, paid up, forfeiture, transfer, increase or decrease of share capital.

Appointment of company secretary.

Accounting and auditing of the company.

Amount can be raised by issuing debentures.

Merger procedures of the company etc.

  

 

Prospectus

A prospectus is an invitation to the public to purchase shares or debentures of the company.

Any circular, advertisement or any other document is given by a company to invitation to the public to subscribe to its shares and debentures.

The prospectus includes:

·          Name, address, qualification and remuneration of the promoters.

·          The information relating to the management and the objectives of the company.

·          The number of shares to be subscribed by directors and the cash to be received from them.

·        Capital structure of the company divided into authorized, issued, subscribed, called up and paid up share capital.

·          Terms and mode of payment, issue of shares on discount or premium.

·          Details about underwriting commission, brokerage and preliminary expenses.

·          Estimated expenditures for the company and estimated income at least for coming three years.

·          Opportunity and risk of the company.

·          Assets and liabilities of the company.

·          Information about dividend and bonus.

·          Other necessary information etc.

 

 

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