Question

The .............. defines the scope of a company‟s
activities.
(a) Prospectus
(b) Statutory Declaration
(c) Memorandum of Association
(d) Articles of Association

Answer 1

The memorandum of association defines the scope of a company.

Detailed answer

So it represents the charter of a particular company and every company requires it.

• It is created during the creation of the company during the start.

• It contains the details and relationships the company shares with its shareholders and investors.
• They also contain the basic information of the company that what it is going to do its work, the objectives and specifications of the company.
• It also contains information about the liabilities, capital clause.
• So it basically defines the companies scope of activities.

Answer 2

The D. Articles of Association defines the scope of a company's activities.

Definition of Articles of Association:

• The Articles of Association (AOA) is the document that contains the purpose of a company along with the regulations for its operations.
• The AOA defines the procedure of accomplishment of tasks related to the management of financial records, and the appointment procedure of directors.
• The AOA includes the information regarding processes and methods a company has to use to attain its goals and purposes.

Components of AOA:

1. Company Name: The company has to adopt an official name in order to qualify as a separate legal entity.
2. Purpose of the Company: The purpose for which the company has been established must be written clearly.
3. Share Capital: This includes the number and types of shares that a company capital is made of.
4. The organisation of the Company: This includes legal information such as registration address, the number of directors and employees etc.
5. Provisions on Shareholder Meetings: The information regarding shareholders meetings such as notices, general meetings etc must be clearly specified.

In India, the AOA is a mandatory legal requirement as per Companies Act, 2013.