Every memorandum of association must contain the following clauses. The first six apply to most companies; the seventh applies only to One Person Companies (OPC).
## The Seven Clauses at a Glance
#
Clause
Purpose / Content
1
Name Clause
States the name of the company (with 'Limited' / 'Private Limited' / 'OPC' suffix as applicable).
2
Situation / Registered Office Clause
States the State in which the registered office of the company is to be situated.
3
Objects Clause
States the objects for which the company is incorporated, and matters considered necessary in furtherance thereof.
4
Liability Clause
States the nature of liability of members — limited by shares, limited by guarantee, or unlimited.
5
Capital Clause
(Only for companies having share capital) States the amount of share capital, division into shares, and the number of shares each subscriber intends to take.
6
Association / Subscription Clause
A declaration by the subscribers that they desire to be formed into a company and agree to take the shares stated against their names.
7
Succession Clause
(Only in case of OPC) Names the person who, in the event of death or incapacity of the sole member, shall become the member of the company (the nominee).
## Why These Clauses?
Each clause answers a fundamental question about the company:
Name → What is it called?
Registered office → Which state regulates it?
Objects → What can it do?
Liability → How much can members lose?
Capital → How is it funded?
Subscription → Who agreed to form it?
Succession (OPC) → Who takes over if the sole member dies?
## Conditional Clauses
Clauses 1–4 and 6 are mandatory for every company.
Clause 5 is mandatory only for companies having share capital. A guarantee company without share capital will not have a capital clause.
Clause 7 is mandatory only for OPCs.
Worked example
### Example 1
Example — Guarantee company without share capital: A Section 8 charitable company is being formed without share capital. Its MOA will contain clauses 1, 2, 3, 4 and 6 — but no capital clause (clause 5). Instead, the liability clause will state the amount each member undertakes to contribute (the guarantee amount) in the event of winding up.
### Example 2
Example — OPC succession clause: Mr A incorporates an OPC. The MOA must contain a succession clause naming Mr B (with B's written consent) as the nominee. If Mr A dies, Mr B automatically becomes the sole member.
⚠️ Common exam mistakes
Including a capital clause in a guarantee company that has no share capital. That clause does not exist for it.
Forgetting the succession clause in an OPC's MOA. It is mandatory and the nominee's prior written consent is needed.
Confusing the subscription clause with the capital clause. The subscription clause is the signature block with the declaration; the capital clause is the financial structure.
Stating that the registered office clause specifies the full address of the registered office. The MOA only states the State — the exact address is notified to the ROC within 30 days (Section 12).
Bare-Act text Section 4(1) · Companies Act, 2013 · click to expand
Section 4(1) — The memorandum of a company shall state— (a) the name of the company...; (b) the State in which the registered office of the company is to be situated; (c) the objects for which the company is proposed to be incorporated and any matter considered necessary in furtherance thereof; (d) the liability of members of the company, whether limited or unlimited, and also state,— (i) in the case of a company limited by shares...; (ii) in the case of a company limited by guarantee...; (e) in the case of a company having a share capital,— (i) the amount of share capital with which the company is to be registered and the division thereof into shares of a fixed amount...; and (ii) the number of shares each subscriber to the memorandum intends to take...; (f) in the case of One Person Company, the name of the person who, in the event of death of the subscriber, shall become the member of the company.