Difference between Memorandum of Association (MOA) and Articles of Association (AOA), Company Law Notes CBCS Pattern

Difference between Memorandum of Association (MOA) and Articles of Association (AOA)
Company Law Notes CBCS Pattern

Memorandum of Association

Memorandum of association is the document which contains the rules regarding constitution and activities and objects of the company. It is fundamental charter of the company. Its relation towards the members and the outsiders are determined by this important document.

Section 2 (56) of the Companies Act, 2013 defines Memorandum as “Memorandum means the Memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous companies law or of this act”.

One of the essentials for the registration of a company is memorandum of association. It is the first step in the formation of a company. Its importance lies in the fact that it contains the fundamental clauses which have often been described as the conditions of the company’s incorporation.

Articles of Association

The Articles contain rules and regulations for the internal management of the company. They are framed with the object of carrying out the aims and object of the memorandum of association and also to monitor that the same are carried as prescribed.

Section 2 (5) of the Companies Act, 2013 defines articles as “Articles means Articles of Association of a company as originally framed or altered from time to time in pursuance of any previous law or of this act including so far as they apply to the company the regulations contain as the case may be in Table A to Schedule I of this act” 

The difference between Memorandum of Association & Article of Association is given here:

BASIS OF DISTINCTION

MEMORANDUM OF ASSOCIATION

ARTICLE OF ASSOCIATION

MEANING

It is a charter of a company .It sets the constitution .It defines limits ,powers and objects of the company

It contains rules and regulation for the internal management of the company

OBJECTIVES

It governs relationship with the external world i.e. creditors, sellers, buyers & debtors

It governs internal relationship between the members of the company.

STATUS

It is the primary document. It is the foundation of the company.

It is the secondary document & it is based on the memorandum of association.

ALTERATION

It is an unalterable document. Alteration can only be done by the permission of court

It can be stitched according to the management a resolution is to be passed and it is within the limits of Memorandum of Association

Ultra Vires Actions

It lays down the boundaries beyond which a company cannot work. All such acts are illegal and they are called ultra vires acts.

The articles are controlled by the memorandum Within it the shareholders and the directors may make such regulations as they feel fit for internal management.

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