COMPARATIVE STUDY BETWEEN ARTICLE OF ASSOCIATION AND

MEMORANDAUM OF ASSOCIATION

1. Introduction about yourself and your topic….

2. Through this presentation I will be explaining the importance and features of these two
documents and also try to analyse the difference between them.

• The Memorandum of Association and the Articles of Association are the two crucial
components of the Companies Act, 2013.
• A company is made when a certain group of people come together to achieve a particular
objective. Usually, such an objective is commercial in nature that allows them to make financial
profits.
• There are a number of steps that must be followed to form a company. An application is filed
with the Registrar of Companies (ROC), and that application is enclosed along with a number
of documents.
• Two such essential documents that are to be submitted with the application is the
Memorandum of Association and Article of association.

3. Starting with the meaning and significance of MOA:

• MOA is basically the “charter of a company”. It is a legal document that outlines the main
justification for a company's creation.
• It is a mandatory legal document that defines the scope of the operations of a company
and works beyond the scope of the document shall be ultra vires acts and will be
considered void.
• MOA is also a public document, which means that anyone wishing to enter into a legal
agreement with a company may do so by paying the necessary amount to the Registrar of
Companies and requesting the MOA in the process. All information about the company
must be included in the memorandum.
• The company's interaction with its stakeholders is governed by the MOA. It enables
shareholders to comprehend the business before purchasing their shares. They use the
MOA to determine how much money to invest in the business.
• Memorandum must be updated if the company wants to expand its business operations
into more market segments.
4. Coming to Articles of Association:
• It lays out how tasks are to be accomplished within the organization, including the
process for appointing directors and the handling of financial records.
• As per Section 2(5) of the Companies Act, 2013 articles mean the Article of Association
of a company, originally framed or altered or applied in pursuance of any previous
company law or of this Act.
• Authorities primarily rely on the articles of association to evaluate and confer a
corporation with a distinct legal personality from its stakeholders.
• The document may detail the name and legal form of the company, its purpose, capital
structure, corporate governance, administration of corporate records, and other terms of
its existence.
• The articles of association also provide a list of all the share-related provisions
• AOA constitutes a contract between the members and among the members themselves.
• Some statutory clauses should be included in the article of associations and other clauses
can be chosen by the members to make them the by-laws of the organization. However,
The Court can declare a clause ultra vires if it is unreasonable.

5. The main differences between MOA and AOA is that:

• MOA describes the powers and objects of the company while the AOA defines its rules.
• The MOA is subordinate to the Companies Act, and the AOA is subordinate to the
memorandum
• It is not possible to amend the MOA retrospectively, while the company can change an
AOA retrospectively.
• The major difference between a memorandum of association and an article of association
is that the memorandum includes six clauses while the company can draft an article as per
the company’s need.
• The MOA is mandatory for all companies, while a public share company can use Table A
in place of an AOA.
• In terms of scope, any actions taken outside the parameters of the MOA are void. On the
other hand, actions taken outside the bounds of the AOA may be approved by a vote of
the shareholders.
 • MOA can be altered after passing special resolution in Annual General Meeting and prior
consent of Central Government or Company Law Board is imperative whereas special
resolution at the AGM is sufficient for altering AOA.
• MOA specifies the interplay between company and third-party while AOA Governs the
interplay between company and its members & also among the members.

In a nutshell, the MOA outlines the business's operating procedures and the rights of its officers.
The MOA's bylaws are contained in the AOA. It provides more specific information about how
the business will be run, including details about voting rights, stock classes, and meeting dates.

Thank you!