Contents

✓ Memorandum of Association
✓ Article of Association
✓ Prospectus
✓ Directors
✓ Meetings
 Memorandum of Association
Memorandum of Association is a legal document which describes the purpose for which the company is
formed. It defines the powers of the company and the conditions under which it operates. It is a document
that contains all the rules and regulations that govern a company’s relations with the outside world.
It is mandatory for every company to have a Memorandum of Association which defines the scope of its
operations. Once prepared, the company cannot operate beyond the scope of the document. It is a
foundation on which the company is made. The entire structure of the company is detailed in the
Memorandum of Association.
The memorandum is a public document. Thus, if a person wants to enter into any contracts with the
company, all he has to do is pay the required fees to the Registrar of Companies and obtain the
Memorandum of Association. Through the Memorandum of Association he will get all the details of the
company. It is the duty of the person who indulges in any transactions with the company to know about its
memorandum.
Section 2(56) of the Companies Act, 2013 defines Memorandum of Association.
All the alterations that are made in the memorandum from time to time will also be a part of Memorandum
of Association.
Object of registering a Memorandum of Association or MOA
Memorandum of Association is essential for registration of a company. Section 7(1)(a) of the Act
states that for incorporation of a company, Memorandum of Association and Articles of Association of
the company should be filed with the Registrar.

Articles of Association
The Companies Act, 2013 defines ‘articles’ as the “articles of association of a company originally
framed, or as altered from time to time in pursuance of any previous company laws or of the
present.” The Articles of Association of a company are that which prescribe the rules, regulations and
the bye-laws for the internal management of the company, the conduct of its business, and is a
document of paramount significance in the life of a company. The Articles of a company have often
been compared to a rule book of the company’s working, that regulates the management and powers of
the company and its officers. It prescribes several details of the company’s inner workings such as the
manner of making calls, director’s/employees qualifications, powers and duties of auditors, etc.
Difference between Memorandum of Association and Articles of Association

S.No. Memorandum of Association Articles of Association

Contains fundamental conditions upon which the company is
1 Contain the provisions for internal regulations of the company.
incorporated.

Meant for the benefit and clarity of the public and the creditors, and Regulate the relationship between the company and its members, as well
2
the shareholders. amongst the members themselves.

Lays down the area beyond which the company’s conduct cannot
3 Articles establish the regulations for working within that area.
go.

4 Memorandum lays down the parameters for the articles to function. Articles prescribe details within those parameters.

Can only be altered under specific circumstances and only as per the
5 provisions of the Companies Act, 2013. Permission of the Central Articles can be altered a lot more easily, by passing a special resolution.
Government is also required in certain cases.

Memorandum cannot include provisions contrary to the Companies Articles cannot include provisions contrary to the memorandum. Articles
6
Act. Memorandum is only subsidiary to the Companies Act. are subsidiary to both the Companies Act and the Memorandum.

Acts done beyond the memorandum are ultra vires and cannot be Acts done beyond the Articles can be ratified by the shareholders as long
7
ratified even by the shareholders. as the act is not beyond the memorandum.
 Prospectus
Prospectus means any notice, circular, advertisement or any other communication, inviting
offers from the public for the subscription or purchase of any shares or debentures, inviting
deposits from the public other than deposits invited by a banking company or a financial
institution approved by the Government described as prospectus.
Prospectus is released by Company to inform the public and investors of the various
securities that are available. These documents describe about mutual funds, bonds, stocks
and other forms of investments offered by the company. A prospectus is generally
accompanied by basic performance and financial information about the company.
Prospectus is a formal legal document, which is required by and filed with the SEBI (Stock
and Exchange Board of India) that provides details about an investment offering for sale to
the public.
Which Company are required to issue Prospectus
▪ Every Public Listed Company who intends to offer shares or debentures of the company to the
public.
▪ Every private company who ceases to be a private company and converts into a public company
and intends to offer shares or debentures of the company to the public.

Requirement of a Prospectus - A document would be considered a prospectus only if it meets the

following requirements -
▪ It should be in writing.
▪ It should be issued by or on behalf of a body corporate.
▪ It should be issued to public.
▪ It should contain invitation to public for making deposits or for subscription of shares in or
debentures of a body corporate.
Contents of Prospectus (Section – 26)
It shall be dated and signed and shall contain the following things:
Every prospectus issued by or on behalf of a public company either with reference to its formation or
subsequently, or by or on behalf of any person who is or has been engaged or interested in the formation of a
public company, shall be dated and signed and shall state the following information, namely:—
(i) Names and addresses of the registered office of the Company, Company Secretary, Chief Financial Officer,
Auditors, legal advisers, bankers, trustees.
(ii) Dates of opening and closing of the issue.
(iii) A statement of separate bank account by the Board of Directors .
(iv) Details about underwriting of the issue.
(v) Consent of the directors, auditors, bankers to the issue, expert’s opinion, if any.
(vi) Procedure and time schedule for allotment and issue of securities.
(vii) Capital structure of the company in the prescribed manner.
(viii) Main objects of public offer and terms of the present issue.
(ix) Present business of the company and its location.
Types of Prospectus – 4 Types
(A) ABRIDGED PROSPECTUS
According to Sec. 2(1) of the Companies Act of 1956, a company cannot issue applications for issue of share or
debentures. It cannot do so if it does not contain the salient features of the prospectus of the memorandum. This is
known as ‘Abridged prospectus’. In other words abridged prospectus is a one that contains the salient features of the
memorandum of the prospectus.

(B) RED HERRING PROSPECTUS

A red herring prospectus, as a first or preliminary prospectus, is a document submitted by a company (issuer) as part of a
public offering of securities (either stocks or bonds).
A red herring prospectus is issued to potential investors, but does not have complete particulars on the price of the
securities offered and quantum of securities to be issued. The front page of the prospectus displays a bold red disclaimer
stating that information in the prospectus is not complete and may be changed, and that the securities may not be sold
until the registration statement, filed with the market regulator, is effective. Potential investors may not place buy orders
for the security, based solely on the information contained within the preliminary prospectus. Those investors may,
however, express an “indication of interest" in the offering, provided that they have received a copy of the red herring at
least 48 hours prior to the public sale. After the registration statement becomes effective, and the stock is offered to the
public, indications of interest may be converted to purchase orders, at the buyer's discretion. The final prospectus must
then be promptly delivered to the buyer.
(C) SHELF PROSPECTUS
(1) Any class or classes of companies, as the Securities and Exchange Board may provide by regulations in this
behalf, may file a shelf prospectus with the Registrar at the stage of the first offer of securities included therein
which shall indicate a period not exceeding one year as the period of validity of such prospectus which shall
commence from the date of opening of the first offer of securities under that prospectus, and in respect of a second
or subsequent offer of such securities issued during the period of validity of that prospectus, no further prospectus
is required.
(2) A company filing a shelf prospectus shall be required to file an information memorandum containing all
material facts relating to new charges created, changes in the financial position of the company as have occurred
between the first offer of securities or the previous offer of securities and the succeeding offer of securities and
such other changes as may be prescribed, with the Registrar within the prescribed time, prior to the issue of a
second or subsequent offer of securities under the shelf prospectus.

(D) DEEMED PROSPECTUS

Section-25 provides that where a company allots or agrees to allot any shares or debentures with a view to these
being offered for sale to the public, any document by which the offer of sale to the public is made, shall for all
purposes be deemed to be a prospectus issued by the company.
 Directors of a Company
Definition - As per Section 2(34) of Companies Act 2013 Director means a director appointed to the Board of a Company. A director is a
person appointed to perform the duties and functions of director of a company in accordance with the provisions of the Companies Act,
2013.
Section 2 (10) of the Companies Act, 2013 defined that “Board of Directors” or “Board”, in relation to a company, means the collective
body of the directors of the company
Responsibility - The board of directors of a company is primarily responsible for:
• determining the company’s strategic objectives and policies;
• monitoring progress towards achieving the objectives and policies;
• appointing senior management;
• accounting for the company’s activities to relevant parties, e.g., shareholders.
Minimum Directors Required in Company -
i. One Person Company - One Director.
ii. Private Limited Company - Two Directors.
iii. Public Limited Company - Three Directors.
Maximum 15 directors can be appointed in any format of Company (OPC, Public, Private). Bypassing Special Resolution Company can
increase the number of Directors beyond 15. Out of appointed directors one director should be resident in India for more than 182 days
in previous calendar year.
 Types of Directors
1. Residential Director - As per Section 149(3) of Companies Act,2013 every company shall at one director who
has stayed in India for a total Period of not less than 182 days in the Previous calendar year.
2. Independent Director - As per section 149(6) an independent director in relation to a company, means a
director other than a Managing Director, Whole Time Director or Nominee Director. Companies which have to
appoint Independent Director:- As per Rule 4 of Companies (Appointment and Qualification of Directors) Rules,
2013 the following class of companies have to appoint at least two independent directors:-
A} Public Companies having Paid up Share Capital - Rs.10 Crores or More;
B} Public Companies having Turnover - Rs.100 Crores or More;
C} Public Companies have total outstanding loans, debenture and deposits of Rs. 50 Crores
3. Small Shareholders Directors - A listed Company may have one director elected by small shareholders. May
appoint upon notice of not less than 1000 Shareholders or 1/10th of the total shareholders, whichever is
lower have a small shareholder director which elected form small shareholder.
4. Women Director - As per Section 149 (1) (a) second provision requires certain categories of companies to
have At Least One-Woman director on the board. Such companies are any listed company, and any public
company having-
1. Paid Up Capital of Rs. 100 crore or more, or
2. Turnover of Rs. 300 crore or more.
5. Additional Directors - Any Individual can be appointed as Additional Directors by a company under section
161(1) of the New Act.
6. Alternate Directors - As per Section 161(2) A company may appoint, if the articles confer such power on
company or a resolution is passed (if a Director is absent from India for at least three months). Additionally, he
will have to vacate the office, if and when the original Director returns to India.
7. Shadow Director - A person, who is not appointed to the Board, but on whose directions the Board is
accustomed to act, is liable as a Director of the company, unless he or she is giving advice in his or her
professional capacity.
8. Nominee Directors - They can be appointed by certain shareholders, third parties through contracts, lending
public financial institutions or banks, or by the Central Government in case of oppression or mismanagement.
9. Difference Between Executive and Non-Executive Director - An Executive Director can be either a Whole-
time Director of the company (i.e., one who devotes his whole time of working hours to the company and has a
significant personal interest in the company as his source of income), or a Managing Director (i.e., one who is
employed by the company as such and has substantial powers of management over the affairs of the company
subject to the superintendence, direction and control of the Board). In contrast, a non-executive Director is a
Director who is neither a Whole-time Director nor a Managing Director.
 Meetings

✓ Every company shall hold the first meeting of the Board of Directors within thirty days of the date
of its incorporation and thereafter hold a minimum number of four meetings of its Board of
Directors every year in such a manner that not more than one hundred and twenty days shall
intervene between two consecutive meetings of the Board.
✓ A meeting of the Board shall be called by giving not less than seven days notice in writing to
every director at his address registered with the company and such notice shall be sent by hand
delivery or by post or by electronic means.
✓ The participation of directors in a meeting of the Board may be either in person or through video
conferencing or other audio visual means, as may be prescribed, which are capable of recording
and recognizing the participation of the directors and of recording and storing the proceedings of
such meetings along with date and time.
 ✓ Every officer of the company whose duty is to give notice under this section and who fails to do
so shall be liable to a penalty of twenty-five thousand rupees.
✓ A One Person Company, small company shall be deemed to have complied with the provisions
of this section if at least one meeting of the Board of Directors has been conducted in each half
of a calendar year and the gap between the two meetings is not less than ninety days.
Meeting Quorum
✓ The quorum for a meeting of the Board of Directors of a company shall be one-third of its total
strength or two directors, whichever is higher, and the participation of the directors by video
conferencing or by other audio visual means shall also be counted for the purposes of quorum.
✓ Winding up of a Company
MEANING
Winding up of a company is a process whereby its
life is ended and its property administrated for the
benefits of its creditors and members. An
administrator called liquidator is appointed and he
takes control of the company, collects its assets,
pays its debts and finally distributes any surplus
among the members in accordance with their rights.
MODES OF WINDING UP

A company can be wound up in any of

the following ways;
1. Compulsory winding up under Tribunal.

2. Voluntary winding up.

1.COMPULSORY WINDING UP UNDER
TRIBUNAL
The cases in which a company may be wound up by
the tribunal are given in Section 433. They are as
follows:
❖ Special resolution of the company.
❖ Default in Holding Statutory Meeting.
❖ Not to Commence business in Time.
❖ Reduction in Number of Members below minimum.
❖ Inability to pay debts.
PETITION FOR WINDING UP

By the company.
By any creditor or creditors.
By any contributory.
By Registrar.
By Central government.
COMPANY LIQUIDATOR

 An company liquidator is a person who realise the asset of the company

and make payments to the creditors and contributors out of the process of
realised assets appointed from a panel by the central government.
PROCEDURE:-
➢Petition.

➢Order by tribunal.
➢Notice to company and Appointment of Provisional Liquidator.
➢Issue of directions to company.
➢Filing objections and a statement of affairs.
➢Appointment of company Liquidator.
➢Intimation to Company liquidator and Registrar.

➢Endorsement in records of company and notification in Gazette and to stock

Exchange.
➢Winding Up committee and its report.
➢Appointment to Advisory Committee.
CONSEQUENCES OF WINDING UP ORDER
❑ Intimation to company liquidator and registrar.
❑ Registrar to perform certain duties.
❑ Directors to submit books of accounts to the
liquidator within 30 days.
❑ Custody of company’s properties to company
liquidator.
❑ Board’s powers come to an end.
❑ Monthly report by liquidator.
❑ Statement as to winding up on document.
REPORT BY COMPANY LIQUIDATOR:-
• Report within 60 days
• Contents of the report
• -nature and details of asset

• -amount of capital issued

• - debts due to the company
• - details of legal cases filed by or against
company
• Any other report, if he thinks fit to make
TRIBUNAL’S DIRECTIONS ON REPORT
1) Fixing time limit for winding up
2) Order for sale of company or its assets
3) Order for investigation
4) Any other order
2. VOLUNTARY WINDING UP

 According to Companies Act, 2013 voluntary winding up

may take place only with the consent of both members as
well as the creditors. For this members are required to
pass an appropriate resolution. Thereafter, two-third in
value of the creditors are also required to give their
consent to such resolution.
CONDITIONS OF VOLU. WINDING UP
Declaration of Solvency.
Resolution at General meeting.
Resolution at Creditor’s meeting.
Delivery of Declaration and Resolution to Registrar
Publication of Resolution.
COMPANY LIQUIDATOR

1. Appointment and Fee

2. Declaration by company liquidator
3. Notice of appointment by Registrar
4. Removal and filling vacancy
DUTIES AND POWERS
To perform functions and duties determined by
company or creditors.
To settle list of creditors.
Maintain books of accounts.
Making final winding up report.
To distribute property.
 Electronic Governance (e-Governance)
Definition: E-governance, expands to electronic governance, is the integration of Information and

Communication Technology (ICT) in all the processes, with the aim of enhancing government ability to address

the needs of the general public. The basic purpose of e-governance is to simplify processes for all, i.e.

government, citizens, businesses, etc. at National, State and local levels.

In short, it is the use of electronic means, to promote good governance. It connotes the implementation of

information technology in the government processes and functions so as to cause simple, accountable and

transparent governance. It entails the access and delivery of government services and communication in a quick

and efficient manner.

Benefits of E-governance - Reduced corruption, High transparency, Increased convenience, Direct participation of

constituents, Reduction in overall cost, Expanded reach of government.

Through e-governance, the government plans to raise the coverage and quality of information and services

provided to the general public, by the use of ICT in an easy, economical and effective manner.
 Types of Interactions in E-Governance
1. G2G (Government to Government): When the exchange of information and services is within the periphery of the
government, is termed as G2G interaction. This can be both horizontal, i.e. among various government entities and
vertical, i.e. between national, state and local government entities and within different levels of the entity.
2. G2C (Government to Citizen): The interaction amidst the government and general public is G2C interaction. Here an
interface is set up between government and citizens, which enables citizens to get access to wide variety of public
services. The citizens have the freedom to share their views and grievances on government policies anytime, anywhere.
3. G2B (Government to Business): In this case, the e-governance helps the business class to interact with the government
seamlessly. It aims at eliminating bureaucratic paperwork, saving time, cost and establish transparency in the business
environment, while interacting with government.
4. G2E (Government to Employees): The government of any country is the biggest employer and so it also deals with
employees on a regular basis, as other employers do. ICT helps in making the interaction between government and
employees fast and efficient, along with raising their level of satisfaction by providing perquisites and add-on benefits
Digital India Initiatives
 It is an umbrella program to prepare India for a knowledge-based transformation.
 It has been launched by the Ministry of Electronics and Information Technology.
Various Initiatives Under Digital India Initiatives
 MyGov: It aims to establish a link between Government and Citizens towards meeting the goal of good
governance.
 Digi-Locker: It serves as a platform to enable citizens to securely store and share their documents with
service providers who can directly access them electronically.
 e-Hospital-Online Registration Framework (ORF): It is an initiative to facilitate the patients to take
online OPD appointments with government hospitals. This framework also covers patient care, laboratory
services and medical record management.
 National Scholarships Portal (NSP): It provides a centralized platform for application and disbursement of
scholarship to students under any scholarship scheme.
 DARPAN: It is an online tool that can be used to monitor and analyse the implementation of critical and
high priority projects of the State.
 PRAGATI (Pro-Active Governance and Timely Implementation): It has been aimed at starting a culture
of Pro-Active Governance and Timely Implementation. It is also a robust system for bringing e-
transparency and e-accountability with real-time presence and exchange among the key stakeholders. It was
launched in 2015.
 Common Services Centres 2.0 (CSC 2.0): It is being implemented to develop and provide support to the
use of information technology in rural areas of the country. The CSCs are Information and Communication
Technology (ICT) enabled kiosks with broadband connectivity to provide various Governments, private and
social services at the doorstep of the citizen.
 Mobile Seva: It provides government services to the people through mobile phones and tablets.
 Jeevan Pramaan: It is an Aadhaar based Biometric Authentication System for Pensioners. The system
provides authenticity to Digital Life Certificate without the necessity of the pensioner being present in
person before his/ her Pension Dispensing Authority (PDA).
 National Centre of Geo-informatics (NCoG): Under this project, Geographic Information System (GIS)
platform for sharing, collaboration, location-based analytics and decision support system for Departments has
been developed.
 National e-Governance Plan (NeGP): It takes a holistic view of e-Governance initiatives across the
country, integrating them into a collective vision and a shared cause.
o It comprises of 31 Mission Mode Projects, approved in 2006, but later it was integrated into Digital
India Program.
e-Kranti: National e-Governance Plan 2.0
 It is an essential pillar of the Digital India initiative.
 It was approved in 2015 with the vision of “Transforming e-Governance for Transforming Governance”.
 There are 44 Mission Mode Projects under e-Kranti, which are at various stages of implementation.
Conclusion
 e-Governance is getting momentum in India, but public awareness and the digital divide are important issues
to be addressed.
 The success of e-Governance measures largely depends on the availability of high-speed internet, and the
nation-wide roll-out of 5G technology in the near future will strengthen our resolve.
Secure Electronic Record - Where any security procedure has been applied to an electronic record at a specific point of
time, then such record shall be deemed to be a secure electronic record from such point of time to the time of verification.
Secure digital signature - If, by application of a security procedure agreed to by the parties concerned, it can be verified
that a digital signature, at the time it was affixed, was-
 unique to the subscriber affixing it.
 capable of identifying such subscriber.
 created in a manner or using a means under the exclusive control of the subscriber and is linked to the electronic
record to which it relates in such a manner that if the electronic record was altered the digital signature would be
invalidated.
then such digital signature shall be deemed to be a secure digital signature.
Digital Signature Certificates (DSC) - Digital Signature Certificates (DSC) are the digital equivalent (that is electronic
format) of physical or paper certificates. Few Examples of physical certificates are driver’s licenses, passports or
membership cards. Certificates serve as proof of identity of an individual for a certain purpose. Likewise, a digital
certificate can be presented electronically to prove one’s identity, to access information or services on the Internet or to
sign certain documents digitally. The Certifying Authorities are authorized to issue a Digital Signature Certificate with a
validity of one or two years.