MoA Analysis of Infosys

MOA-INFOSYS
BM-B | Group 6
Sidhant Mahipal B15114
Utkarsh Agarwal B15120
Aishwary Kumar Gupta B15066
Ankit Pokharna B15072
Nekkanti Yamini B15090
Pranshu Gupta B15096

1Section B | Group 6
Memorandum of Association
MoA is one the most important documents for a company as it contains the entire description
of the conditions and clauses upon which the company is allowed to operate. MoA forms a part
of the company’s constitution with the Articles of association being the other one. MoA
historically contained limited information about the company such as name of the company,
type of the company, location of registered office of the company, objects of the company and
subscription of its share capital. Up until October 2010, all the information related to above
fields had to be mentioned in the MoA, however, it is no longer deemed necessary to state the
above. Let us still look at them one by one:
Name of the company: Under this clause, the name of the limited company has to be clearly
mentioned and should not bear striking similarities with another company’s name. Also, the
name should end with the word ‘Limited’ showing the limited nature of the company.
Registered office – Under this clause, the state of the registered office of the company needs
to be mentioned. However, just mentioning the state can suffice without having to write the
full address. The company must keep all the registers in the registered office and handle all the
incoming and outgoing of the communication correspondence.
Objects clause – This is one of the most important clauses in MoA which states that the
company is free to carry out any business activity as long as it is not illegal. The object clause
also lists the down all the major activities undertaken by the firm. This can be divided into 2
parts – Main objects and ancillary objects.
Liability clause – This clause needs to state the extent to which the shareholders of the
company are liable in case of dissolving of the company.
Capital clause – This clause requires the company to state their authorized share capital and
its structure. Also, the types of shares, their nominal value and the list of the company’s assets
are to be mentioned under this clause.
Association clause – This clause affirms that the shareholders which have signed the MoA are
associating and forming the company. Atleast 7 persons are required in order to form a public
company and minimum 2 persons to form a private one. The signing should be done in the
presence of a witness who must also append his signature.
Important provisions in the MoA of Infosys
Important Provisions in MOA of Infosys
1) Name Clause: The MoA document clearly mentions that:
“The name of the Company is INFOSYS LIMITED “
2) Registered Office Clause: As mentioned in MoA document
“The registered office of the Company Infosys will be situated in the State of
Karnataka”
3) The Object Clause:
I. The objects for company establishment are:
(A) Primary/Main Objects of Infosys:-
1. Infosys can establish, uphold, conduct, deliver, procure or make available

services of every type including commercial, statistical, financial, legal,
management, educational, engineering, data processing, accountancy,
communication and any other technological social or kind of services.
2. In able to carry on the business Infosys can act as an importer, exporter, lesser,
buyers, sellers and dealers of all types of electronic constituents and equipment’s
essential for attaining the above objectives.
(B) Ancillary Objects:
4. Infosys carries on all kinds of campaign business, and specifically to form, float, lend
money to assist, and control any companies, relations, or undertakings whatever.
5. It also establishes, provides, maintains and conducts or otherwise subsidize research
labs, experimental stations, workshops and libraries for scientific, industrial,
commercial and technical research and experiments.
This means that they can undertake and carry on scientific, industrial, commercial,
economic, statistical and technical research, surveys and investigations
They can also promote studies, research investigation and invention, both scientific
and technical by providing, endowing, or assisting labs, universities, workshops,
libraries, lectures, meetings, exhibitions and conferences. Also by providing for the
salary to scientific or technical professors/teachers, scientists and the incentive of
scholarship, prizes and grants to students, research-workers or inventors or otherwise
and generally to encourage, promote and reward studies, research, investigations,
experiments and creations of any kind.
6. Infosys also aims to provide for the welfare of employees or ex-employees of the
Company and the wives, widows, kin or dependents of such persons by constructing
or contributing to the building of houses or apartments or by direct money, pensions,
allowances, gratuities, bonus or other payments or by creating and from time-to-time
promising or contributing to provident and other funds, institutions and trusts and by
providing or subscribing or contributing towards places of instruction and recreation,
infirmaries and dispensaries, medical and other attendance and assistance as the
Company shall think fit at that point.
7. Infosys will subscribe or contribute or otherwise might assist or guarantee money to
charitable, benevolent, religious, national, public or any other institutions, objects or
purposes or for any demonstration.
8. Infosys might commence and perform as a trustee in some undertaking which might
seem to the Company desirable.
9. Infosys can buy, sell, creation, repair, alter and exchange, hire, export, and also deal in
all kinds of articles and things which might be required for the purposes of any of its
businesses.
4) Liability Clause:
As clearly stated in the MoA the Liability of the members is limited.

5) Capital clause:
a) “Infosys has an authorized Share Capital of Rs ` 1200,00,00,000 (One thousand two
hundred crore) which is divided into 240,00,00,000 (two hundred forty crore) Equity
Shares each of Rs 5 (Rupees five ), with the power to increase or reduce the capital of
the business and it may divide the shares in the capital for the time being further into
several classes and also attach correspondingly preferential, qualified, deferred or
special rights, privileges or any other conditions as decided in lines of the Articles of
Association (AoA) of the company. Infosys maymodify any such rights, any privileges
or conditions in such manner as may be permitted under law by the Companies Act,
2013 or by the AoA of the company for the time being”.
b) The authorized capital of Infosys amplified form 600 crore to 1200 crore by
resolution of the shareholders passed on 4th
June, 2015.
6) Subscription Clause:
The below table gives the names of the persons (and their details) who are the founding
members and hold the share capital in the following division

7) Directors clause
Number of Directors
Infosys cannot appoint more than 18 and less than 3 unless and until approved in AGM &
subject to the provisions of section 252 of the Companies act.
Special Directors
When the Director enters into an agreement for technical assistance or for providing any
security with any government or financial institution on behalf of the company, the director
shall have the power to give the rights to that entity to appoint or nominate the directors subject
to the provisions of section 255 of the Companies Act. The appointed directors shall be entitled
to the same rights and privileges as any other director
Nominee Director
Any financial corporation which holds debentures or shares as part of the credit given to the
company shall have the right to appoint any person as director (whole time/non-wholetime). It
has also right to remove any such director and replace with new person at any time.Retirement
of such person is also under the discretion of the corporation. The appointed director shall have
the same rights and obligations as any other director of the company. Nominee director shall
hold the office until the corporation holds the debentures or shares as part of the guarantee for
the debt. Such nominee directors shall vacate the office as soon as the company paid off the
money owing to the corporation or cleared the liability of any guarantee.
Alternate Director
In the absence of the original director an alternate director can be appointed by the board for a
period not less than 3 months. Such alternate director shall vacate the office when the origin
director returns. If the term of the original director expires before his return, automatic re-
appointment of the director shall take place as in the case retiring directors.
Remuneration
Remuneration of the directors shall be decided by the board of the directors from time to time,
sitting fee for attending the meetings shall be with in the limits as mentioned in the section 320
of the Companies Act. In addition to the above remuneration directors are entitled to be paid
all travelling and boarding expenses incurred in attending the meetings related to the business.
Special remuneration shall be provided to the directors for the extra services provided by such
director. Such special remuneration may be in addition to or replacement of the usual
remuneration as determined by the board, confirmed by the General Body and according to the
provisions of the Companies Act
Terms of Office
At every General Body meeting one third of the board of directors shall be reappointed in the
place od retiring directors. Retiring directors are the ones who have been holding the office for
longest time. According to section 284 of the Companies Act, company may remove the
director before the expiry of his term.
Relevance of The Object Clause in A Company’s MOA
Section 13 of the Memorandum of Association of the Companies Act mandates the inclusion
of the object clause which provide the reasons of existence/objectives for the business entity to
accomplish. This serves a two-fold purpose –

 It gives an idea to prospective shareholders as to what purposes their invested money
will be utilized
 It enables the people dealing with the company to ascertain its powers
The Companies (Amendment) Act 1965 requires that the companies formed after the
amendment must divide the Objects into Main Objects, Objects incidental to the Main Objects
and Other Objects. The Main Objects consists of objects which are incidental or ancillary to
the attainment of the main objects of the business entity. ‘Other Objects’ includes objects which
are not included in the ‘Main Object’, however, they can be persuaded by the company at any
time in the future.
The objects in the object clause can be chosen at the discretion of the subscribers of the
Memorandum of Association subject to the following –
 The objectives cannot be in conflict with the policy of the Constitution of India
 The objects cannot be against the public policy or so as to disrupt public order
 The objects cannot include and activity which is illegal as stated by law
Also, in the case of a non-trading company, the objects clause under the Memorandum of
Association must specify the specific states to whose territories the objects clause of the
business entity extend to.
The objects clause is bound by the doctrine of ultra vires (ultra vires means that which is beyond
legal capacity). Therefore, for a company, whatever which is not stated in the memorandum as
the objects or powers is prohibited by the doctrine if ultra vires. This means that neither the
company nor the contracting party can sue on it. The company cannot make it valid, even if
every member assents to it. This is done in order to-
 Protect the interests of the shareholder
 If the act is beyond the powers of only the director’s powers, the shareholders can ratify
it.
 The act if found in violation of the objects clause will be considered void
If a particular business is not covered under the objects clause, it can be added in the
Memorandum of Association with a 75 percent majority of the members of the company.
The object clause thus offers protection and a legal boundary to the nature of business activities
a firm may undertake. This leads to protection and assurance to the shareholders by ensuring
that their invested money is not going to be risked in any other undertaking than the one they
intended to invest in. Also, this assures the creditors by confining the nature of business of the
firm. Also, by confining the activities within a specified field, it also serves the purpose of
public interest.
Object Clause – Infosys
The relevance of object clause in Infosys states the various objectives for which the company
has been setup. Infosys has its registered office in Bangalore, Karnataka in 1981. Its main
objects state:
a) To establish and maintain all kinds of services pertaining to commercial enterprises from
various sectors such as banking, medical, automobile etc.
b) To operate and conduct business as an importer / exporter, buyer / lesser and sellers / dealers
in all types of electronic components for performing the numerous projects it undertakes.
The above clauses allows the company the complete scope and freedom to start businesses
wherever it finds the relevant opportunities.

The company has also defined ancillary objectives which helps it attain its primary objects.
These objects help in enumerating the multiple ways it could go about in reaching its objectives
and all clearly defines its limitations in conducting the same. The ancillary objects being:
a) To carry out various promotional activity related to business activity such as capital raising
and control of its subsidiaries.
b) To setup and supervise research laboratories, workshops and experimental stations for the
purpose of scientific, industrial and technical research. It also allows them to award scientists,
teachers, students in the way of scholarships, grants and prizes to reward and encourage
scientific temperament.
c) To take steps to ensure employment welfare of its employees including family members. It
also makes grants of money in the form of bonuses, gratuities and pensions etc.
d) To contribute and provide assistance to charitable, religious, scientific and national
institutions.
e) To act as agents, registrars or brokers and as trustees for any registered entity or person and
undertake sub-contracts.
f) To enter into partnerships and any other suitable structure for profit-sharing, union of
interest, reciprocal concessions with any company or person.
g) To apply, purchase or acquire patents and / or licenses which provides with the exclusive
right or limited rights to protect its proprietary information.
h) To receive money, valuable and other goods for safe custody.
i) To actively manage the company portfolio by investing or lending in activities or projects it
deems in the best interest of the Company.
j) To carry on the business of an investment company and to buy, underwrite and to invest in
shares, debentures, bonds, and other securities issued or guaranteed by any Government, State,
Sovereign, and other locally recognized institutions.
k) To carry on business related to electronics, textiles, chemicals, hotels, construction, and
engineering items.
Through its various objects in its memorandum and articles of association, the Company has
been provided with the legal rights to perform various actions necessary to conduct in a manner
it benefits its shareholders. The objects define the responsibilities of the Company with respect
to its various stakeholders and serves as a guiding to the management in running the daily
affairs of the Company.

References
1. https://www.infosys.com/investors/reports-filings/Documents/Memorandum0303.pdf
2. https://indiankanoon.org/doc/1980681/
3. http://www.mondaq.com/india/x/217140/Corporate+Commercial+Law/Duties+And+Liab
ility+Of+Directors+An+Indian+Laws+Perspective
4. http://www.taxclick.org/type/company-law/the-clauses-of-memorandum-of-association-
under-company-act-2013-and-format-of-moa

MoA Analysis of Infosys

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