Corporate LawMemorandum of Association

Submitted To: Submitted By:Dr. Deepika Tomar Akshara Talegaonkar

Mitika GhorpadeAdarsh Jain

Anumeet SandhuGagandeep Singh

B Com(H) III Sem, Sec ‘A’

REGISTRATION

MOA AOACOPY OF

AGREEMENT, IF ANY

DECLARATION

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.

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

Clauses of MOA1. 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)

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 onewitness. Each subscriber must written number of shares he shall take. At least one share should be taken by each subscriber.

MOA OF RELIANCE INDUSTRIES LIMITEDName 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 limitedCapital 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)-------------------------------------------------------------------------------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. SHIVNANJAPPA

36, Cunningham Road, Bangalore - 18

500 C.V. SRINIVASA MURTHY

• 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.

• 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.

WHY EXACTLY WERE INVESTORS WERE NOT UNHAPPY AND YET SEBI WANTED TO PROTECT

THEM..?

• 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.

SO WHY WAS THE SEBI UNHAPPY..?

• 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.

• 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.

THANK YOU