Memorandum of Association and Articles of Association

MOA (Memorandum of Association) and AOA (Articles of Association) are legal documents that are associated with the formation and regulation of a company. They are part of the constitutional documents of a company and are required during the process of company incorporation. Here are the key differences between MOA and AOA:

Nature:

MOA (Memorandum of Association): It is the foundational document of a company. It contains the fundamental clauses that define the company’s scope of activities and its relationship with the outside world. It sets out the company’s objectives, powers, and the extent of its authority.

AOA (Articles of Association): AOA, on the other hand, is concerned with the internal regulations and rules governing the management of the company. It deals with matters such as the rights and duties of shareholders, directors, and the conduct of the company’s affairs.

Scope:

MOA: It defines the company’s main objectives and the types of activities it is authorized to undertake. Any activity undertaken by the company beyond the scope defined in the MOA is considered ultra vires (beyond the legal powers) and, therefore, void.

AOA: It deals with the rules and regulations for the internal management of the company, including the rights and responsibilities of shareholders and directors, the issuance of shares, board meetings, voting rights, etc.

Alteration:

MOA: It can be altered, but the alteration is subject to stricter regulations and often requires approval from the shareholders and, in some cases, the approval of regulatory authorities.

AOA: It can be altered more easily than the MOA. Changes to the AOA usually require a special resolution passed by the shareholders.

Relationship:

MOA: It establishes the company’s relationship with the outside world, including its customers, suppliers, and other entities.

AOA: It governs the internal relationships within the company, such as the relationships between the company and its shareholders and directors.

In summary, while the MOA defines the company’s external objectives and powers, the AOA outlines the internal rules and regulations for the management and operation of the company. Both documents are crucial for the proper functioning and legal compliance of a company.

Books Recommended:      Check it Out

1. Beatsen (ed.)-Anson’s Law of Contract : (27th Ed. 1998)

2. Anson-Law of Contract (1998), Universal, Delhi

3. Pollock and Mulla-Indian Contract Act

4. Avtar Singh-Law of Contract, Eastern Book Co.(Lucknow)

5. S.K.Kapoor- Samvidha Vidhi (Hindi)