Difference Between Memorandum of Association and Articles of Association All the companies has its own Memorandum of Association and Articles of Association, many people got puzzled between these two. ‘Memorandum of Association’ abbreviated as MOA, is the root document of the company, which contains all the basic details about the company. ‘Articles of Association’ shortly known as AOA, is also a maor document which contains all the rules and regulations designed by the company. Below you can see the basic differences between the Memorandum Me morandum of Association and Articles Articles of Association.
!ontent" Memorandum of Association #s Articles of Association $. !omparison !hart %. Definition &. 'ey Differences (. !onclusion !omparison !hart BASIS OF COMPARISON
MEMORANDUM OF ASSOCIAION ASSOCIAION
ARIC!ES OF ASSOCIAION
Meaning
Memorandum of Association is a document that contains all the fundamental information which are re)uired for the incorporation of the company.
Articles of Association is a document containing all the rules and regulations that governs the company.
Defined in
*ection % +%-
*ection % +%-
ype of /nformation contained
0owers an and ob obects of of th the co company.
1ules of of th the co company.
*tatus
/t is subordinate to the !ompanies Act.
/t is subordinate to the memorandum.
1etros 1etrospec pectiv tivee 2ffect 2ffect
he memora memorandu ndum m of of assoc associati iation on of the company cannot be amended retrospectively.
he articles of association can be amended retrospectively.
BASIS OF COMPARISON
MEMORANDUM OF ASSOCIAION
ARIC!ES OF ASSOCIAION
Maor contents
A memorandum must contain si3 clauses.
he articles can be drafted as per the choice of the company.
Obligatory
4es, for all companies.
A public company limited by shares can adopt able A in place of articles.
!ompulsory filing at the time of 1egistration
1e)uired
5ot re)uired at all.
Alteration
Alteration can be done, after passing *pecial 1esolution +*1- in Annual 6eneral Meeting +A6M- and previous approval of !entral 6overnment +!6- or !ompany 7aw Board +!7B- is re)uired.
Alteration can be don in the Articles by passing *pecial 1esolution +*1- at Annual 6eneral Meeting +A6M-
Definition of Memorandum of Association Memorandum of Association +MOA- is the supreme public document which contains all those information that are re)uired for the company at the time of incorporation. /t 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 1O! +1egistrar of !ompanies-. /t contains the obects, 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. Any person who deals with the company like shareholders, creditors, investors, etc. is presumed to have read the company, i.e. they must know the company8s obects and its area of operations. he Memorandum is also known as the charter of the company. here are si3 conditions of the Memorandum" •
Name Clause " Any company cannot register with a name which !6 may think unfit
and also with a name that too nearly resembles with the name of any other company. •
Situation Clause " 2very company must specify the name of the state in which the
registered office of the company is located.
•
O#$ect Clause " Main obects and au3iliary obects of the company.
•
!ia#ilit% Clause " Details regarding the liabilities of the members of the company.
•
Ca&ital Clause " otal capital of the company.
•
Su#scri&tion Clause " Details of subscribers, shares taken by them, witness etc.
Definition of Articles of Association Articles of Association +AOA- is the secondary document, which defines the rules and regulations made by the company for its administration and day to day management. /n addition to this the articles contain the rights, responsibilities, powers and duties of members and directors of the company. /t also includes the information about the accounts and audit of the company. 2very company must have its own articles, however, a public company limited by shares can adopt able A instead of Articles of Association. /t comprises of all the necessary details regarding the internal affairs and the management of the company. /t is prepared for the persons inside the company, i.e. members, employees, directors, etc. he governance of the company is done according to the rules prescribed in it. he companies, can frame its articles of association as per their re)uirement and choice.
'ey Differences Between Memorandum of Association and Articles of Association he maor differences between memorandum of association and articles of association are given as under" $. Memorandum of association is a document that contains all the condition which are re)uired for the registration of the company. Articles of association is a document that contains the rules and regulation for the administration of the company. %. Memorandum of Association is defined in section % +%- while the Articles of Association is defined in section % +%- of the /ndian !ompanies Act $9:;. &. Memorandum of Association is subsidiary to the !ompanies Act, whereas Articles of Association is subsidiary to both Memorandum of Association as well as the Act. (. /n any contradiction between the Memorandum and Articles regarding any clause, Memorandum of Association will prevail over the Articles of Association. :. Memorandum of Association contains the information about the powers and obects of the company. !onversely, Articles of Association contain the information about the rules and regulations of the company. ;. Memorandum of Association must contain the si3 clauses. On the other hand, Articles of Association is framed as per the discretion of the company.
<. Memorandum of Association is obligatory to be registered with the 1O! at the time of registration of !ompany. As opposed to Articles of Association, is not re)uired to be filed with the registrar, although the company may file it voluntarily. !onclusion Memorandum and Articles are the two very important documents of the company, which are to be maintained by them as they guides the company on various matters. hey also help in the proper management and functioning of the company throughout its life. hat is why every company is re)uired to have its own memorandum and articles.
