# Association / Subscription Clause

This is the clause where subscribers declare their desire to be formed into a company and agree to take the shares specified opposite their names.

## Statutory Requirements for Subscription

1. The memorandum must be signed by each subscriber in the presence of at least one witness who must attest the signatures.

2. Each subscriber must take at least one share (if the company has share capital).

3. Each subscriber must write opposite his name the number of shares (if any) he agrees to take.

Note: Subscribers can include body corporates.

---

# Succession Clause (Only for OPC)

## Applicability

Only a One Person Company (OPC) has this clause in its Memorandum.

## Purpose

This clause states the name of the nominee who, upon the death of the sole subscriber/member, shall become the member of the company.

## Change of Nominee — Simpler Procedure

Any change in the name of the nominee shall NOT be deemed to be an alteration of the memorandum.

The lengthy procedure of Section 13 is NOT required.
Only notice of the changed nominee is to be given to the Registrar.

---

## Important Note

The above clauses (Name, Situation, Object, Liability, Capital, Subscription, Succession) are compulsory and are designated by the Companies Act as "conditions", on the basis of which alone a company is incorporated.

Worked example

### Example 1

Q: Mr. P is the sole member of POPC OPC. He had earlier nominated Mr. Q. Mr. P now wishes to change the nominee to Mr. R. Does he need to follow Section 13 alteration procedure?

A: No. A change of nominee in an OPC is expressly NOT deemed an alteration of memorandum. Mr. P needs only to give notice of the changed nominee to the Registrar. No special resolution, no postal ballot, no MGT-14 filing under Sec 13 is required.

### Example 2

Q: A memorandum of a public company is signed by 3 subscribers, but no witness has attested their signatures. Is the memorandum validly subscribed?

A: No. The Act mandates that the memorandum must be signed by each subscriber in the presence of at least one witness who must attest the signatures. Without such attestation, the statutory requirement is not satisfied.

⚠️ Common exam mistakes

Assuming change of nominee in OPC requires full Section 13 procedure — only notice to ROC is needed.
Forgetting that body corporates can also be subscribers to the memorandum.
Not requiring at least one witness to attest the subscribers' signatures.
Forgetting that EVERY subscriber to a share-capital company must take at least one share and indicate the number opposite his name.

Reference: Section 4 (subscription requirements); Section 3(1)(c) and Rules (OPC nominee) — Companies Act, 2013

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

Association / Subscription Clause and Succession Clause (OPC)

Worked example

⚠️ Common exam mistakes