Section 4 of CA 2013 : Section 4: Memorandum

Explanation using Example

Imagine that Alice and Bob decide to start a technology consulting company. They want to register it as a private limited company under the name "TechSavvy Consultants Private Limited". They would need to draft a memorandum of association as per Section 4 of the Companies Act, 2013, which would include the following:

• The name "TechSavvy Consultants Private Limited", ensuring that it ends with "Private Limited" as it is a private company and that the name is not too similar to any existing company.
• The State where the registered office will be located, for example, "Karnataka".
• The object clause stating that the company will engage in providing technology consulting services and any other activities necessary for these purposes.
• A declaration that the liability of the members is limited to the amount unpaid on their shares.
• Details of the share capital, such as the total amount (e.g., INR 1,00,000) divided into shares of a fixed amount (e.g., INR 10 per share), and that Alice and Bob each agree to subscribe to, say, 5000 shares.

Before finalizing the name, they would apply to the Registrar of Companies to reserve "TechSavvy Consultants Private Limited". If the Registrar finds that the name is not undesirable or similar to an existing company, it will reserve the name for 20 days, allowing them to proceed with the incorporation process.

If later it was discovered that they provided incorrect information to reserve the name, they could face penalties, or if the company was already incorporated, they might have to change the company's name or face more severe consequences like striking off or winding up of the company.