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Business Studies

Incorporation

Which of the ...

Question

Which of the following is incorrect statement as to memorandum and articles of association?

A

Act done by company beyond the scope of memorandum is ultra virus

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B

Memorandum may include any clause contrary to provisions of Companies Act

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C

Generally articles can be altered by the members by passing a special resolution only

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D

The articles are subsidiary to Companies Act and memorandum

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Solution

The correct option is B Memorandum may include any clause contrary to provisions of Companies Act
Companies Act is like supreme when it comes to forming a company, so memorandum of association cannot include any clause which is contrary to the sections of Companies Act.
On the other hand, the articles formulate the relationship between the company and its own members and between the members too.

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