Differences Between Memorandum of Association (MOA) and Articles of Association (AOA)¶
Understanding the distinctions between the Memorandum of Association (MOA) and the Articles of Association (AOA) is fundamental for anyone involved in the corporate sector. While both documents are crucial in the governance and operation of a company under the Companies Act, they serve different purposes and have different implications for the company's management and its relationship with the outside world.
| Parameter | Memorandum of Association (MOA) | Articles of Association (AOA) |
|---|---|---|
| Meaning | Defines the company's relation with outsiders and outlines the scope of its activities. | Governs the internal management and operations, detailing the rights of members. |
| Scope | Details the activities the company can engage in. | Regulates internal management and operations. |
| Contents | Must include the company's name, registered office, objects, liability, capital, and association clauses. | Contains regulations for the company, which can be tailored to its needs. |
| Status | Supreme document, fundamental to the company's existence. | Subordinate to the MOA and the Companies Act. |
| Alteration | Can be altered only under specific conditions, requiring government and shareholder approval. | Can be altered by shareholders' approval through a special resolution. |
| Purpose | To define the company's objectives and the conditions under which it operates. | To define rules for the company's internal management to achieve its objectives. |
| Parties Concerned | Defines the company's relationship with external parties. | Defines the relationships among members and between the members and the company. |
| Ratification | Acts beyond the scope are considered ultra vires (beyond powers) and void, not subject to ratification by shareholders. | Acts ultra vires the AOA but not the MOA can be ratified by a special resolution of the shareholders. |
| Registration | Mandatory registration with the Registrar of Companies at the time of company registration. | Filing with the Registrar is not mandatory; the company may or may not file it. |
| Subsidiary | A subsidiary of the Companies Act. | Subsidiary to both the Companies Act and the MOA. |
| Obligatory | Every company must have an MOA. | Not obligatory for a public company limited by shares, which can opt for Table A instead of an AOA. |
| Section Under the Companies Act | Meaning defined under Section 2(56) of the Companies Act. | Meaning defined under Section 2(5) of the Companies Act. |
These differences underscore the distinct roles the MOA and AOA play in the legal framework governing companies in India, highlighting their importance in corporate governance and legal compliance.
Ask Hive Chat
Hive Chat
Hi, I'm Hive Chat, an AI assistant created by CollegeHive.
How can I help you today?
How can I help you today?
🎶