Section 18 : Memorandum of Association

1) The Memorandum of Association of a company shall state the following matters:

a) The name of company,

b) The address of the registered office of the company,

c) The objectives of the company,

d) The acts to be carried out to accomplish the objectives of the company,

e) The figure of the authorized capital of the company and the figure of the share capital to be issued by the company for time being and the figure of undertaken to be paid by the promoter of the company,

f) Types of shares of the company, the rights and powers inherent in such shares, value of each share and number of shares of different types,

g) Restrictions, if any, in the purchase or transfer of shares,

h) Number of shares which the promoters have undertaken to subscribe for the time being,

i) Terms of payments of share amounts,

j) Statements that the liability of shareholders shall be limited,

k) The maximum number of shareholders in case of a private company,

l) Other necessary matters.

2) If any of the following matters shall be done or provided, in addition to those mentioned in Sub-section(1), the memorandum of association shall also state such matters:

a) If the promoter or any other person is entitled to subscribe shares or acquire title thereto in any manner other than by making payment in cash, such matter,

b) If the company is to acquire any property in any manner from the promoter or any other person at the time of commencement of its transactions such matter,

c) If the company itself to bear the expenses incurred on its incorporation, such matter,

d) If the promoter or any other person is entitled to any special privilege or right from the company, such matter.

3) In subscribing shares or acquiring title thereto by the promoter or any other person in consideration fit other than cash payment as mentioned in Clause (a) of Sub- section (2) and in acquiring any property by he company from the promoter or any other person at the time of commencement of its transactions as mentioned in cause (b), in the case if a public company, such consideration other than cash and such property shall be caused to be valuated by an engineer or accountant holding certificate to conduct valuation work under the prevailing law.

(3A) Even after the company is incorporated, the company may grant the promoter or any other person the right to purchase, issue or acquire rights in shares in any form other than cash.

(3B) When the company issues or sells shares or grants rights to the promoter or any other person in any form other than cash, a special resolution shall be passed by the general meeting of the company. When passing such special resolution, the company may decide to issue or sell shares at a discount.

(3C) When issuing or selling shares or granting rights to the promoter or any other person in any form other than cash, the company may also take as a basis the transfer of intellectual property, value addition, services, business reputation (goodwill), technical information (know-how sharing) or technical knowledge received by the company from the promoter or person. The price of the shares so issued shall be based on the price determined by an engineer or accounting professional who has obtained a valuation certificate in accordance with the prevailing law, in a reasoned manner.

(3D) If there is a written agreement between the company and the employees of the company, shares may be granted in lieu of remuneration, allowances and facilities provided to such employees.

(3E) When granting shares to the promoter or any other person in any form other than cash pursuant to clause (a) of sub-section (2), the amount shall not exceed twenty percent of the paid-up capital of the company.

Provided that, in the case of a company registered as a startup, the amount shall not exceed forty percent of the paid-up capital of the company.

4) The criteria for the valuation of any property pursuant to Sub-section (3) shall be as prescribed; and unless such criteria are prescribed, the person valuating such property shall mention the criteria employed by him/her to valuate the property.

5) If the memorandum of association is inconsistent with this Act it shall ipso facto be void to the extent of such inconsistency.

6) The format of memorandum of association shall be as prescribed.