Comparison Chart of MOA and AOA

Comparison Chart Of MOA And AOA
For 1st Sem, MBA Students, KSOM.

By Prof. Zahid Parwez (V/Faculty)
Basis for
Memorandum of Association Articles of Association
Comparison
Memorandum of Association is a Articles of Association is a
document that contains all the fundamental document containing all the
Meaning
information which are required for the rules and regulations that
incorporation of the company. governs the company.
Defined in Section 2 (28) CA1956 Section 2 (2) CA 1956.
Type of
Information Powers and objects of the company. Rules of the company.
contained.
It is dominant instrument. It is supreme It is subordinate to the
Status
document. memorandum.
The memorandum of association of the
Retrospective The articles of association can
company cannot be amended
Effect be amended retrospectively.
retrospectively.
The articles can be drafted as
Major contents A memorandum must contain six clauses. per the choice of the
company.
A public company limited by
Obligatory Yes, for all companies. shares can adopt Table A in
place of articles.
Compulsory filing
at the time of Required Not compulsory.
Registration
Alteration can be done, after passing
Alteration can be done in the
Special Resolution (SR) in Annual General
Articles by passing Special
Alteration Meeting (AGM) and previous approval of
Resolution (SR) at Annual
Central Government (CG) or Company
General Meeting (AGM)
Law Board (CLB) is required.
Definition of Memorandum of Association
Lord Caiorns observed that : “Memorandum of Association of a company is it’s character

and defines the limitations of a power of a company. It contains the fundamental condition
upon which alone the company is allowed to incorporated.”
Acc. to Section 2(56) of the Company Act, 2013 Memorandum means MOA as originally
framed or as altered from time to time in pursuance of any previous company law or of this
Act.
Memorandum of Association (MOA) is the supreme public document which contains all
those information that are required for the company at the time of incorporation. It can also
be said that a company cannot be incorporated without memorandum. At the time of
registration of the company, it needs to be registered with the ROC (Registrar of Companies).
It contains the objects, powers, and scope of the company, beyond which a company is not
allowed to work, i.e. it limits the range of activities of the company.
The Memorandum is also known as the charter of the company. Acc. to the Sec 4 of the
Company Act, 2013 the memorandum of every clause should have clauses.This clauses are
also known as the conditions in the memorandum. There are six conditions/clause of the
Memorandum:
 Name Clause – [Sec 4(1),(2),(3).] CA,2013. Any Company cannot register with a
name which Central Government may think unfit and also with a name that too nearly
resembles with the name of any other company.
 Situation Clause – (Sec 12) Every Company must specify the name of the state in
which the registered office of the company is located.
 Objective Clause – [Sec 4(1)(c)] CA,2013Main objects and auxiliary objects of the
Company. The purpose of the objective clause is
1. To enable the subscriber to the memorandum to know the uses to which their
money may be put.
2. To enable the creditor and persons dealing with the Company to know what is
permitted range of the Company or activities is.
 Liability Clause – Details regarding the liabilities of the members of the Company.
This clause will state whether the liability of the members shall be limited, and, if so
whether limited by shares or guarantee.
 Capital Clause – The memorandum of a company having share capital shall state the
amount of share capital with which the company is to be registered and the division
thereof into shares of a fixed amount.
 Subscription Clause – The subscription clause is the last clause and contains
declaration of the subscriber. Each subscriber must sign the memorandum and take at
least one share and right opposite his name the no. of shares he takes. Details of
subscribers, shares taken by them, witness, etc.
Definition of Articles of Association
Articles of Association (AOA) are the secondary document, which defines the rules and
regulations made by the company for its administration and day to day management. In
addition to this, the articles contain the rights, responsibilities, powers and duties of members
and directors of the company. It also includes the information about the accounts and audit of
the company.
Every company must have its own articles. However, a public company limited by shares can
adopt Table A of schedules 1 CA 1956 instead of Articles of Association. It comprises of all
the necessary details regarding the internal affairs and the management of the company. It is
prepared for the persons inside the company, i.e. members, employees, directors, etc. The
governance of the company is done according to the rules prescribed in it. The companies can
frame its articles of association as per their requirement and choice.
Key differences between Memorandum of Association and Articles of Association.
The major differences between memorandum of association and articles of association are
given as under:
1. Memorandum of Association is a document that contains all the condition which are
required for the registration of the company. Articles of Association is a document
that contains the rules and regulation for the administration of the company.
2. Memorandum of Association is defined in section 2 (28) while the Articles of
Association is defined in section 2 (2) of the Indian Companies Act 1956.
3. Memorandum of Association is subsidiary to the Companies Act, whereas Articles of
Association is subsidiary to both Memorandum of Association as well as the Act.
4. In any contradiction between the Memorandum and Articles regarding any clause,
Memorandum of Association will prevail over the Articles of Association.
5. Memorandum of Association contains the information about the powers and objects
of the company. Conversely, Articles of Association contain the information about the
rules and regulations of the company.
6. Memorandum of Association must contain the six clauses. On the other hand, Articles
of Association is framed as per the discretion of the company.
7. Memorandum of Association is obligatory to be registered with the ROC at the time
of registration of Company. As opposed to Articles of Association, is not required to
be filed with the registrar, although the company may file it voluntarily.
Conclusion
Memorandum and Articles are the two very important documents of the company, which are
to be maintained by them as they guide the company on various matters. They also help in the
proper management and functioning of the company throughout its life. That is why every
company is required to have its own memorandum and articles.

Comparison Chart of MOA and AOA

Uploaded by

Comparison Chart of MOA and AOA

Uploaded by

Comparison Chart Of MOA And AOA

For 1st Sem, MBA Students, KSOM.

Definition of Memorandum of Association

Lord Caiorns observed that : “Memorandum of Association of a company is it’s character

Definition of Articles of Association

You might also like