Memorandum Of Association Part 1

Question 1

Name clause
Registration clause
Principal line of business
Prohibited business

Answer 1

Here are the smart notes in sentence form with headings:

Memorandum of Association

• The Memorandum of Association is a document that contains various clauses with information about the company.
• The clauses may vary depending on the type of company or business.

Name Clause

• The name clause states the company’s name with the addition of specific words:
  
  • Public Company: “Limited”
  • Private Company: “(Private) Limited”
  • Single Member Company: “(SMC-Private) Limited”
  • Guarantee Limited Company: “(Guarantee) Limited”
  • Unlimited Company: “Unlimited”

Registered Office Clause

• The registered office clause states the province or part of Pakistan where the company’s registered office will be situated.
• Example: If the company’s registered office is in Lahore, the clause will state “the registered office of the company shall be situated in the province of Punjab”.

Principal Line of Business Clause

• The principal line of business clause states the main business activity of the company.
• The principal line of business is determined by the business that generates the highest revenue or holds the most substantial assets.
• Example: If a company generates more revenue from sugar production, the principal line of business will be manufacture and sale of sugar.

Object Clause

• The object clause is not a separate clause in the Memorandum of Association under the Companies Act, 2017.
• For existing companies, the object clause in the Memorandum of Association will be treated as the principal line of business.

Restrictions on Business Activities

• A company cannot engage in a business that is prohibited by law.
• A company cannot engage in a restricted business without obtaining necessary licenses, registrations, or approvals.