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Difference Between MOA and AOA

For setting up a company and its operations the MOA (Memorandum of Association) and AOA (Articles of Association) are the two charter documents required. The MOA is the root document of the company consisting of all the details associated with the company.
Difference between MOA and AOA
Apart from this the AOA are details of all the rules and regulations designed by the company. MOA is the cornerstone on which the company is built so it is the constitution of the company. While on the other hand it consists of the bye-laws by which the company is governed. In this article we will discuss in detail the difference between MOA and AOA.
Table of Content

What is a MOA?

The Memorandum of Association (MOA) is the ultimate public document containing all the information a company needs at the time of incorporation. It can also be said that a company cannot be formed without a memorandum. At the time of company registration, it must be registered with the ROC (Registrar of Companies). It contains the objectives, powers and scope of the company beyond which the company is not allowed to operate, i.e. limits the scope of the company’s activities.
Every person dealing with the company, such as shareholders, creditors, investors, etc., is supposed to be familiar with the company, i.e. must know the objectives and scope of the company.

What are the Main Clauses of MOA?

The different clauses mentioned in a MOA are as follows:

Name Clause

In this clause the name of the company is mentioned. In case of a public company ‘limited’ is mentioned and in case of private company ‘private limited’ is mentioned.

Situation Clause

This clause mentions the state in which the registered office of the company is situated. It also defines the geographic constraints of the company.

Object Clause

This clause defines the main and auxiliary objects of the company.

Liability Clause

This clause mentions the liability of the shareholders of the company whether it is limited, unlimited or a state owned company.

Capital Clause

This clause mentions the total capital a company can procure.

Subscription Clause

This clause consists of the initial subscriber’s name, address, and their contact information.

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What is an AOA?

AOA is a document which defines the rules and regulations of the company made for its administration and day to day management. In addition, the articles of association specify the rights, responsibilities, powers and duties of the members and directors of the company. It also provides information on company accounts and audits.
Each company should have its own articles. It contains all the necessary information about the company’s internal affairs and management. It is prepared for persons within the company, i.e. members, employees, directors, etc. The management of the company is conducted in accordance with the rules laid down therein. Companies can create their own articles of association as per their requirements and choice.

What are the Contents of an AOA?

The below are mentioned the contents of AOA of the company:

Information consisting of conducting of meetings and holdings

In this the information related to sending of notice, conducting meetings, maintenance of minutes of meetings is described.

Information Associated with Shares of the Company

This includes information associated with conversion, transfer and forfeiture of shares.

Information related to Rights, Duties, and Removal of Directors

In this the information related to powers, duties and appointment, removal of directors is mentioned.

Information related to Winding up of Company

All the rules and procedures governing the winding up of a company are set out in the articles of association. The assets of the company are distributed among the members and trustees. The statutes determine the procedure and extent of distribution of these assets during the winding up of the company.

What is the Difference Between MOA and AOA?

The major points of difference between MOA and AOA are as follows:
  • The first difference between MOA and AOA is that MOA describes the powers and objectives of the company while AOA defines its rules.
  • In the event of any inconsistency between the Memorandum and the Articles of Incorporation as to any provision, the Memorandum of Association shall prevail over the Articles of Association.
  • The memorandum of association contains information about the company’s powers and objectives. Conversely, articles of association provide information about the company’s rules and regulations.
  • To amend the MOA, a special resolution must be passed at the Annual General Meeting with the prior approval of the central government, while amendments to the AOA can only be made by a Special Resolution (SR) at the Annual General Meeting (AGM).
  • At the time of incorporation, the MOA is required to be registered with the Registrar of Companies. In the case of AOA, the company is not required to meet such requirements, although there is a provision for voluntary registration.

Conclusion

MOA and AOA are very important documents for a company and there is some difference between MOA and AOA. Therefore, one must be very careful while drafting it. These documents form the foundation of the company even before its incorporation. Both MOA and AOA guide the company on different matters of concern while incorporation of a company. These documents also help in the proper administration and management of the company. Therefore, each company must draft its own memorandum and articles.

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