Wednesday, January 26, 2011

Whether a Minor can be a Signatory to the Memorandum of Association of a Company ?


In case if during a incorporation of a private limited company, if only two signatories are there to the Memorandum of Association and if one is a minor, then it will not be valid as in such situation, a minor who is a signatory to the memorandum of Association of the company will become director automatically by the operation of law if no other name is mentioned in the Articles of Association of such company

Even otherwise , a minor cannot be a signatory to the memorandum of association of a company. Since, signatory to the memorandum of association will automatically become the first directors of the company, in such scenario, a minor cannot be a signatory to the memorandum of association of a company.
Generally , a minor cannot enter into contract hence cannot be the subscribers to MOA. Subscribers to MOA means the person promises to take the shares in proposed company. In this situation Minor cannot promise.

The Companies Act, 1956 generally not define the minimum age limit for becoming a director of the company. A minor is not competent to contract. Under section 184 of the Indian Contract Act, 1872, a person who is not the age of majority can not become an agent. In consequence a minor cannot be appointed to an office of director of a company.

For appointment of a Managerial person he should be one who has completed the age of 25 years and has not attained the age of 70 years.

As per Part I of Schedule XIII is as under, for appointment of MD or WTD , minimum age is fixed as
the age of 25 years and has not attained the age of 70 years.
Exception: A special resolution is required for the appointment of a managerial person if he
(i)    Has attained the age of 70 years; or
(ii) Has not completed the age of 25 years, but has attained the age of majority (i.e. 18 years).
Form 32 - there is an instruction that appointee as a director should be of more than 18 age.

Thus, a minor cannot be a subscriber to a memorandum  of any company as he lacks capacity to contract and subscription to memorandum is a contract to subscribe a particular amount of shares and a minor cannot do that under existing laws.

In view of the above , a minor cannot be signatory to the memorandum of association of a company.

1 comment:

  1. should form 23 be filed for appointment of WTD in a private company

    ReplyDelete