Memorandum of Association (MoA) and Aricles of

Association (AoA) of a company.

WHAT IS MEMORANDUM OF ASSOCIATION?

The Memorandum of Association (MoA) is a legal document that lays out the framework for the
establishment of a company. It is one of the essential documents required to set up a company in many
jurisdictions, including India, the United Kingdom, and other common-law countries.

The MoA includes the company's name, registered office address, nature of business, authorized share
capital, and the names and signatures of the subscribers who are the initial shareholders. It also outlines
the company's objectives, powers, and limitations, which the company must operate within.

FORMAT OF MoA
The format of the Memorandum of Association may vary slightly depending on the jurisdiction and the
type of company being formed. However, generally, the following information is included in the
Memorandum of Association:

1. Name Clause: This clause specifies the name of the company that is being formed.

2. Registered Office Clause: This clause specifies the registered office of the company.

3. Object Clause: This clause specifies the main objects of the company and the activities that it is
authorized to carry out. It is important to note that the company cannot engage in activities that are not
specified in this clause.

4. Liability Clause: This clause specifies the liability of the members of the company. It could be limited
by shares or guarantees or unlimited.

5. Capital Clause: This clause specifies the amount of authorized share capital of the company and the
number of shares that can be issued.

6. Association Clause: This clause states the intention of the subscribers to form the company and
become members.

The format of the Memorandum of Association may also include other clauses that are specific to the
jurisdiction or the type of company being formed.
Objectives in registering MoA
The objectives of registering the Memorandum of Association (MoA) are as follows:

1. To provide legal status: The MoA is a legal document that defines the scope of a company's activities
and helps provide it with a legal identity. It also helps establish the company as a separate legal entity
from its owners or shareholders.

2. To define the company's purpose: The MoA sets out the company's objectives and the activities it is
authorized to undertake. This helps to ensure that the company operates within the scope of its
objectives and complies with the applicable laws and regulations.

3. To protect the interests of shareholders: The MoA outlines the rights and obligations of the
shareholders, which helps protect their interests. It also helps prevent any unauthorized activities or
decisions that could adversely affect the shareholders.

4. To facilitate capital raising: The MoA specifies the authorized share capital of the company, which
helps investors understand the potential size of the company and the amount of capital required for its
operations. This helps in raising capital through the issuance of shares.

5. To facilitate decision-making: The MoA helps in decision-making by outlining the company's powers
and limitations. It provides guidance to the management and directors on the activities that the
company can undertake, which helps them make informed decisions.

In summary, registering the Memorandum of Association is a crucial step in the formation of a company,
as it provides legal status, defines the company's objectives, protects the interests of shareholders,
facilitates capital raising, and facilitates decision-making.

Clauses and contents of Memorandum of Association

The clauses of the Memorandum of Association (MoA) may vary depending on the jurisdiction and the
type of company being formed. However, some of the common clauses that are typically included in the
MoA are as follows:

● Name Clause: This clause specifies the name of the company and ensures that the name is unique
and does not violate any existing trademarks or laws.

● Registered Office Clause: This clause specifies the address of the registered office of the company,
which is the official address for communication and legal purposes.

● Object Clause: This clause specifies the main objectives of the company and the activities that it is
authorized to undertake. It outlines the scope of the company's operations and ensures that it operates
within the legal and regulatory framework.

● Liability Clause: This clause specifies the liability of the members of the company. It could be limited
by shares or guarantees or unlimited.
● Capital Clause: This clause specifies the authorized share capital of the company and the number of
shares that can be issued. It also outlines the rules and procedures for issuing and transferring shares.

● Association Clause: This clause states the intention of the subscribers to form the company and
become members.

● Alteration Clause: It outlines the procedures and requirements for making any changes or alterations
to the MoA.

● Winding-up Clause: This clause outlines the procedures for winding up the company in case of
insolvency or any other reason.

● Miscellaneous Clause: This clause includes any other provisions or information that is relevant to the
formation and operation of the company.

It is important to note that the MoA must comply with the relevant laws and regulations of the
jurisdiction in which the company is being formed.

AoA (ARTICLES OF ASSOCIATION)

Definition of Articles of Association under the Companies Act, 2013

The Companies Act 2013 offers a comprehensive definition and outlines provisions of the Articles of
Association. Section 2(5) of the Companies Act 2013 defines the Articles of Association as a document
that encapsulates the rules and regulations governing company affairs management.

In accordance with Section 5 of the Companies Act 2013, the Articles of Association must align with the
Act’s provisions and necessitate each subscriber’s signature to the memorandum of association. This
signing must occur in the presence of at least one witness who attests to the signature. Additionally, the
articles must be printed, organized into paragraphs, and consecutively numbered.

Objectives Outlined in the Articles of Association

Section 5 of the Companies Act 2013 outlines the key objectives of the Articles of Association, specifying
that they must:

Include regulations for the management of the company.

Cover matters as prescribed under the relevant rules.

Additionally, it’s important to note that the Articles of Association do not prohibit a company from
incorporating additional provisions or making necessary alterations to facilitate its operations.

Nature and Contents Encompassed within the Articles of

Association

Nature of the Articles of Association (AOA)

The Articles of Association (AOA) possess a binding nature, serving as a definitive document that
delineates the rules and regulations governing the management and functioning of the company. Within
its provisions, the AOA comprehensively defines the rights, duties, and responsibilities of the company’s
directors, shareholders, and officers.

Contents
The Articles of Association encompass rules and by-laws pertaining to various crucial aspects of the
company’s operations, including:

Share Capital

 Rights of different shareholders, issuance of share certificates, commission payments, and more.
 Lien of Shares
 Calls on Shares
 Procedures for Share Transfer
 Transmission of Shares
 Forfeiture of Shares
 Surrender of Shares
 Conversion of Shares into Stocks
 Share Warrants
 Alteration of Capital:
 Increase, decrease, or rearrangement of capital.
 General Meetings and Proceedings
 Voting Rights of Members
 Appointment, Remuneration, Qualifications, and Powers of Directors
 Proceedings of Board of Directors Meetings
 Dividends and Reserves
 Accounts and Audits
 Borrowing Powers of the Company
 Provisions for Winding Up of the Company
Components of the Articles of Association
The Articles of Association serve as a foundational document that establishes a company’s internal
regulations and management framework. This document comprises several key components, including:

 Name Clause: This clause defines the company’s name and specifies its legal structure, whether
private or public.
 Registered Office Clause: Specifying the address of the registered office, this clause serves as the
official communication address and legal proceedings location.
 Object Clause: This section outlines the primary objectives and purposes of the company, detailing
the authorized activities it can engage in.
 Liability Clause: The liability clause elucidates the extent of members’ liability, whether it is limited or
unlimited.
 Share Capital Clause: Defining the authorized share capital, types of shares, and the rights and
privileges associated with each class of shares.
 Management Clause: This clause delineates the powers, duties, and responsibilities of the company’s
directors, along with the procedures for their appointment, removal, and compensation.
 General Meetings Clause: Outlining the procedures for convening and conducting general meetings,
this section addresses notice periods, quorum, voting rights, and the resolution-making process.
 Dividend Clause: This clause specifies the rules and procedures governing the distribution of
dividends to shareholders.
 Winding-up Clause: Outlining procedures for the company’s winding up in cases of bankruptcy,
liquidation, or dissolution.

These components are crucial for ensuring effective corporate governance and must be drafted in
accordance with the legal requirements stipulated in the Companies Act 2013.