Subscription Clause: Clauses of Memorandum of Association
A subscription clause is one of the mandatory clauses of memorandum of association. Every company is an artificial person that is governed by the clauses of memorandum of association and articles of association. Because of this, companies enjoy perpetual succession. What this means is even when the members, owners, et cetera of the company change, the company continues to exist.
The Subscription Clause
The Subscription Clause is the sixth and last of the primary clauses of memorandum of association. This clause provides the details of the first subscribers of the company. The details include their names, signatures, addresses, etc. These details are provided via a document known as the ‘subscriber sheet’. The subscriber sheet to the MOA is an important document.
Who is a subscriber?
A subscriber is essentially one of the first shareholders of any company. While incorporating a private limited company, two subscribers are required, whereas incorporation of public companies requires seven subscribers. Generally, a subscriber can be any individual, company, or corporate body. An easy way to understand a subscriber is this thinking of them as the company’s founding fathers. No matter how much the company grows and changes, its founding fathers will remain the same. (Incorporating a one-person company only needs one subscriber; that subscriber needs to be an individual).
Also Read: Capital clause of memorandum of association
The Subscriber Sheet
The subscriber sheet to the MOA is a vital document that is required to be submitted along with the MOA during the company registration process. It provides the details of the first members of the company.
The required details include:
- The name of the subscribers.
- The details of the father or spouse of the subscribers.
- The complete address of the subscribers with a valid pin code.
- The pan card number and occupation of the subscribers.
- Signatures of the subscribers. The signatures are extremely important as that is what contractually binds the subscribers to the company; it is what officially makes them the company’s first shareholders.
- If a subscriber is a Company or corporate body, its director or partner’s signature on behalf of the company.
- The subscription sheet needs to mention the total number of shares that have been subscribed to by each subscriber. In other words, the shareholding status of each subscriber must be mentioned.
Every subscriber sheet requires a witness; The witness authenticates details of the subscriber sheet. This witness generally is a chartered accountant or a company secretary. The witness’s basic details and signature also need to be provided within the subscriber sheet.
|Sr. No.||Name, address, occupation, PAN of the subscriber||Number of shares||Subscriber’s signature||Name, address, occupation, and signature of the witness.|
NRI and foreign national subscribers
When an NRI is signing the subscriber sheet from a place outside India, their signature has to be witnessed as well as authenticated by a public notary of whichever country they are in or by an official of the embassy.
And if the subscriber is a foreign national, then:
- If they are residents of a nation that falls under the Hague Apostille Convention, 1961, their signature, address, and proof of identification need to be authorized by a public notary of their country and need to be duly attested as required by the Hague Convention.
- If the subscriber is a resident of a Commonwealth nation, their signature, proof of identity, and address need to be notarized by any public notary of their country.
- If the subscriber is residing in a nation that does not fall under the Hague Apostille Convention, 1961, and is also not a Commonwealth nation, then their signature, proof of identity, and address need to be notarized by a notary public of their nation. Additionally, a consular officer or a diplomatic officer under the diplomatic and consular officer act 1948 needs to validate their notarised documents.
- If the foreign national is residing in India while becoming a subscriber, as long as they possess a valid business visa, they are considered a valid subscriber.
Altering the subscription clause
The memorandum of association is generally an amendable document. Almost every mandatory clause in and memorandum of association can be amended. The only exception is the subscription clause. The subscription clause cannot be amended in any situation.
To get help regarding your MOA or any other related problems during company registration, hop onto LegalWizin. Our legal experts will guide you through any and all aspects of business registration, be it a new business or an old one! Reach out to us to get an answer to all your queries!
Monjima is a lawyer and a professional content writer at LegalWiz.in. She has a keen interest in Legal technology & Legal design, and believes that content makes the world go round.
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