Justify the following statement:Memorandum of Association defines the limitations of the powers of the company.

Justify the following statement:Memorandum of Association defines the

1.	Justify the following statement:Memorandum of Association defines the limitations of the powers of the company.
Answer» The Memorandum of Association is a basic or fundamental or primary document of a company. It contains the following clauses: Name clause, Address clause, Object clause, Liability clause, Capital clause, Association of subscription clause. The entire business centres around its object clause. Object clause of the Memorandum of Association defines the area beyond which the company cannot do anything. It determines the powers of the company. It helps the stakeholders to know what is its permitted range of operation. A company is governed by Memorandum of Association and any act beyond it shall be considered as ultra-vires. Hence, Memorandum of Association defines the limitations of the power of the company.