Difference between MoA and AoA

Publishing Date: 23 Dec, 2024

Introduction 

Understanding the key documents that define a company's foundation and governance is crucial. Articles of Association (AoA) and Memorandum of Association (MoA) serve distinct purposes. The MoA outlines the company's objectives and scope, while the AoA establishes its internal management rules. This blog will explore the differences between these documents, their importance, and why they are vital to a company's operations.

What is MoA? 

MOA stands for Memorandum of Association. It is a fundamental and important document required to start or incorporate a company. It is also known as the “Charter or Constitution of the Company.” MOA highlights the company’s objective, its scope, its activities and the relationship with the shareholders. It is compulsory for all companies. Its key purpose is to set limits and power of a company to protect the interest of its shareholders. Each detail is written in the MOA in a very detailed and structured manner. 

MOA of every company must contain these five following clause: 

1. Name of Clause
2. Registered office clause 
3. Objective Clause 
4. Liability Clause 
5. Capital Clause

Why is Registering MOA important? 

Registering MOA (Memorandum of Association) is essential to establish a company because it defines the company's objective and assures compliance with regulations. It also safeguard the interests of stakeholders which provide transparency and sets operational boundaries. Under the Company Act, registering MOA is a legal requirement. If anyone fails to register MOA, the company cannot be incorporated. 

What is AoA? 

AoA stands for Article of Association. It is also considered as an important document required to start a company. It needs to be filed with ROC along with MOA at the time of incorporation. It is also known as by-laws of the company that helps to regulate smooth management of internal operation of a company. AOA is a subordinate of the memorandum that contains rules and regulations. It defines the power, rights and duties of the board of directors. It also helps to establish relations between the company and its members. 

Following mentioned points are contained in the contents of AOA:

1. Details of Share Capital.
2. Each details of qualification, power, remuneration and other relevant details of Director’s.
3.  Company’s dividends and reserves rules 
4. Details of company accounts and audit
5. Company’s borrowing powers related provisions 
6. Conducting meetings related provisions 
7. Company’s winding up process. 

Difference between MoA and AoA

Here is the difference between MoA and AoA given below: 

Conclusion 

For a company's legal foundation and governance, the Memorandum of Association (MoA) and Articles of Association (AoA) are crucial documents. An AoA outlines internal management rules, while the MoA outlines the company's objectives and external boundaries. Through their combined efforts, they ensure legal compliance, transparency, and efficient operations. Having a better understanding over these documents helps stakeholders, directors and manage company’s activities effectively. A well and detailed structured MOA and AOA are essential for a company’s success and growth within legal and operational frameworks. 

Frequently Asked Question 

1) Can MOA be altered? 

Yes, MOA (Memorandum of Association) can be altered by a special resolution at a shareholders meeting. 

2) What MOA contains? 

MOA majorly contains five clauses such as Name of Clause, Registered office clause, Objective Clause, Liability Clause and Capital Clause. 

3) What AOA Contains? 

AOA contains rules which are related to meetings, directors appointment, voting rights and dividends. 

4) Is AOA required registration? 

Yes, AOA which stands for Articles of Association required to be registered with ROC (Registrar of Companies) at the time of Company’s incorporation. 

5) Is AOA required for LLP? 

No, LLP does not require AOA.