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Ultravires MoA

Corporate & Other Laws

The act done beyond MoA is void. Does the law penalise a company for violating its MoA. eg: If IndigoLearn starts stock brokerage business (not mentioned in object clause) along with selling courses, that businesss will not be valid. Will the Law penalise IndigoLearn Pvt Ltd?

Aman Mahajan

CA Final

★ 19K+

11-Jan-21 11:36

330

Answers (1)

For default in complying with the requirements of section 4 (Memorandum), i think the penalty will be as per section 450 (Punishment where no specific penalty or punishment is provided). Company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to Rs. 10,000 and where the contravention is continuing one with a further fine which may extend to Rs. 1000 for every day after the first during which the contravention continues.