This is a guide, not a form. The memorandum and articles are filed at incorporation and are difficult and slow to change afterwards, and almost every early-stage company discovers at its first fundraise that its articles were adopted without being read. Work through the decisions below before incorporation — they cost nothing then and a great deal later.
Memorandum and Articles of Association
Drafting notes and decision checklist
This is a guide, not a form. The memorandum and articles are filed at incorporation and are difficult and slow to change afterwards, and almost every early-stage company discovers at its first fundraise that its articles were adopted without being read. Work through the decisions below before incorporation — they cost nothing then and a great deal later.
1. What Each Document Does
| Memorandum of Association | Articles of Association | |
|---|---|---|
| Function | The company’s charter — defines what it is and what it may do, and its relationship with the outside world | The internal rulebook — how the company is governed, how shares move, how decisions are taken |
| Contents fixed by | The Companies Act, 2013, which prescribes the clauses that must appear | The company, within the limits of the Act; model forms are available in the Schedule to the Act |
| Binds | The company and its members, and is notice to the world | The company and its members as a contract among them |
| If it conflicts with the Act | The Act prevails | The Act prevails |
| If they conflict with each other | The memorandum prevails | Subordinate to the memorandum |
| How to change | Special resolution and, for some clauses, approval of a regulator or tribunal, with filing | Special resolution with filing; entrenched provisions need more |
| Where investors look | Objects and capital clauses | Everything — this is where the investor terms must be written |
2. The Memorandum — Clause by Clause
2.1 Name clause
States the name of the company, ending with "Private Limited" or "Limited" as applicable. Reserve the name before incorporation and check it against existing companies, existing LLPs, and registered trade marks. A name that clears the company registry can still infringe a trade mark; the registry check and the trade mark check are different searches, and only the second one prevents a rebrand two years later.
2.2 Registered office clause
States only the State in which the registered office is situated, not the full address. The address itself is notified separately at incorporation and on any change. Consequence: moving the office within the State does not touch the memorandum; moving it to another State does, and requires a special resolution and approval of the relevant authority. Choose the State with that in mind.
2.3 Objects clause
States the objects for which the company is proposed to be incorporated, and any matter considered necessary in furtherance of those objects. Decisions to take here:
(a)Draft the main objects broadly enough to cover the business as it will plausibly develop over the next several years, and narrowly enough to be meaningful. A company incorporated to develop software that later becomes a lending business will need to amend.
6 more pages in the Word file
Preview of the first page. Highlighted fields are the ones you fill in — they appear the same way in Word. Scroll the preview to read on; the full document runs to 7 pages.
These notes accompany the template and explain the drafting choices, the compliance points and the mistakes most often made with this document. They appear as a final page in the Word file, intended to be deleted before the document is executed.
The memorandum and articles are filed through the incorporation process and are generated in the prescribed electronic forms. What this document does is set out the decisions to take before that form is filled in, because the form itself does not prompt for them and the defaults are rarely what a company raising capital wants.
The most common failure is not a wrong choice but no choice at all: articles adopted from a template by an incorporation agent, never read, and discovered at the first funding round to prohibit something the round requires. Reading them once at incorporation takes an hour.
Shares cannot be issued below face value. A ₹ 10 face value silently constrains anti-dilution adjustments, convertible note conversions at a low cap, and option exercise prices, and each of those problems appears at a moment when there is no time to fix it. A ₹ 1 face value removes the whole class of problem and costs nothing at incorporation.
Allotment beyond the authorised capital is void. Between a funding round, an option pool expansion and exercises, headroom disappears faster than founders expect, and increasing it needs a resolution, a filing and a fee on the increase. Set it generously at the start.
Several regulators require specific objects wording and will not accept a generic clause, which means a licence application can stall until the objects are amended — a process measured in weeks. If any regulated activity is even contemplated, get the wording before incorporation.
Moving within a State is a board matter. Moving to another State requires a special resolution, approval of the relevant authority, advertisement and notice to creditors, and takes far longer than anyone plans for. Choose the State deliberately, particularly where the founders expect to relocate.
A shareholders’ agreement does not bind the company or a transferee. Preference terms, reserved matters, transfer restrictions, tag, drag and leaver provisions must be in the articles to be effective against anyone other than the signatories. Amending the articles is normally a condition precedent to completion, and it is the step most often left to the last week.
An entrenchment provision makes specified provisions harder to alter than by special resolution. It is a genuine protection for a minority, and it equally prevents the company from making a change that everyone later wants. Consider it at a funding round rather than at incorporation, and only for a small number of provisions.
A seal is no longer mandatory, but if the articles require one, documents executed without it are open to challenge. Either dispense with the requirement in the articles or specify clearly who may affix it and who countersigns. Companies frequently retain the clause and then never use the seal.
Subscription money for the initial shares must be paid and evidenced. Unpaid subscription capital is a routine diligence finding, is embarrassing to explain, and is difficult to remedy cleanly years afterwards. Pay it into the company’s account at incorporation and keep the statement.
Once the articles have been amended three or four times across successive rounds, no single document states the position and the risk of an internal conflict rises sharply. At that point adopt an entirely new set by special resolution rather than layering another amendment.
Reflects Indian law current as of {{DATE OF USE}}. The prescribed forms, the model articles, approval routes and fee structures all change — have the memorandum and articles settled by a company secretary before incorporation, and reviewed again before the first funding round.
This is a ready-to-use template provided for convenience. Laws and requirements change, and every situation is different — please have it reviewed by a qualified professional (a lawyer, company secretary, or chartered accountant as relevant) before you rely on it.