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ARTICLES OF ASSOCIATION

The Articles of Association (AOA) are the internal rules governing a company's day-to-day operations and relationships among members, while the Memorandum of Association (MOA) outlines the company's fundamental information and objectives. Both documents are essential for company incorporation, with the MOA being mandatory for registration and the AOA being subordinate to it. Alterations to either document require specific procedures, and they collectively ensure proper management and functioning of the company.

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52 views

ARTICLES OF ASSOCIATION

The Articles of Association (AOA) are the internal rules governing a company's day-to-day operations and relationships among members, while the Memorandum of Association (MOA) outlines the company's fundamental information and objectives. Both documents are essential for company incorporation, with the MOA being mandatory for registration and the AOA being subordinate to it. Alterations to either document require specific procedures, and they collectively ensure proper management and functioning of the company.

Uploaded by

innocent angel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ARTICLES OF ASSOCIATION:

What is Articles of Association:


Articles are bye-laws of the company. They contain rules and regulations on day to day issues and
internal affairs of the company e.g. regulations regarding minimum number of directors, or rights
and liabilities of various classes of shareholders
Articles are subordinate to Memorandum and Companies Act 2017.
Who is required to register it:
A company limited by guarantee and an unlimited company are required to register their Articles.
 If these companies have share capital, articles shall state amount of share capital which
company proposes to be registered.
 If these companies have no share capital, articles shall state number of members with which
company proposes to be registered.
A company limited by share:
 may register its articles, or
 may adopt Table A of the first schedule to the Companies Act 2017
Step-wise Procedures for Alteration in Articles:
1. Company shall pass Special Resolution to alter the articles:
2. Within 30 days of the resolution, Company shall file with Registrar a copy of altered articles
of association.
3. Registrar shall register the same.
Copies of Memorandum and Articles:
Every member of a company can request company, after payment of prescribed fee, to supply a
copy of memorandum or articles of company. Company shall supply it to members within 14 days.
Every copy issued after alteration in memorandum or articles shall include such alteration. In case
of violation, officers of company shall be liable to fine.

Comparison Chart

Basis for
Memorandum of Association Articles of Association
Comparison
Memorandum of Association is Articles of Association is a
a document that contains all document containing all
Meaning the fundamental information the rules and regulations
which are required for the that governs the
incorporation of the company. company.
Type of
Powers and objects of the
Information Rules of the company.
company.
contained
It is subordinate to the It is subordinate to the
Status
Companies Act. memorandum.
Retrospective The memorandum of The articles of association
Effect association of the company can be amended
cannot be amended retrospectively.
Basis for
Memorandum of Association Articles of Association
Comparison
retrospectively.
The articles can be
A memorandum must contain
Major contents drafted as per the choice
six clauses.
of the company.
Only a private company is
required to frame its
articles while a public
Obligatory Yes, for all companies.
company limited by
shares can adopt Table F
in place of articles.
Compulsory
filing at the time Required Not required at all.
of Registration
Alteration can be done, after
passing Special Resolution Alteration can be done in
(SR) in Annual General the Articles by passing
Alteration Meeting (AGM) and previous Special Resolution (SR)
approval of Central at Annual General
Government (CG) or Company Meeting (AGM)
Law Board (CLB) is required.
Regulates the relationship
between company and its
Defines the relation between
Relation members and also
company and outsider.
between the members
inter se.
Acts done
Can be ratified by
beyond the Absolutely void
shareholders.
scope

Definition of Memorandum of Association

Memorandum of Association (MOA) is the supreme public document that


contains all the information that is required for the company at the time of
incorporation. It can also be said that a company cannot be incorporated
without a memorandum. At the time of registration of the company, it needs
to be registered with the ROC (Registrar of Companies). It contains the
objects, 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 company’s objects and its area of operations. The Memorandum is also
known as the charter of the company. There are six conditions of the
Memorandum:

Clauses of Memorandum of Association

 Name Clause – Any company cannot register with a name that CG


may think unfit and also with a name that too nearly resembles the
name of any other company.
 Situation Clause – Every company must specify the name of the
state in which the registered office of the company is located.
 Object Clause – Main objects and auxiliary objects of the company.
 Liability Clause – Details regarding the liabilities of the members of
the company.
 Capital Clause – The total capital of the company.
 Subscription Clause – Details of subscribers, shares taken by them,
witnesses, 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. In addition to this, the articles contain the rights,
responsibilities, powers, and duties of members and directors of the
company. It also includes information about the accounts and audits of the
company.

Every company must have its own articles. However, a public company
limited by shares can adopt Table F instead of Articles of Association. It
comprises all the necessary details regarding the internal affairs and the
management of the company. It is prepared for the persons inside the
company, i.e. members, employees, directors, etc. The governance of the
company is done according to the rules prescribed in it. The companies
can frame their articles of association as per their requirement and choice.

Key Differences Between Memorandum of Association


and Articles of Association
The major differences between memorandum of association and articles of
association are given as under:

1. A Memorandum of Association is a document that contains all the


conditions which are required for the registration of the company.
Articles of Association is a document that contains the rules and
regulations for the administration of the company.
2. Memorandum of Association is subsidiary to the Companies Act,
whereas Articles of Association is subsidiary to both Memorandum of
Association as well as the Act.
3. In any contradiction between the Memorandum and Articles regarding
any clause, the Memorandum of Association will prevail over the
Articles of Association.
4. Memorandum of Association contains information about the powers
and objects of the company. Conversely, Articles of Association
contain information about the rules and regulations of the company.
5. Memorandum of Association must contain the six clauses. On the
other hand, Articles of Association are framed as per the discretion of
the company.
6. Memorandum of Association is obligatory to be registered with the
ROC at the time of registration of the Company. As opposed to
Articles of Association, is not required to be filed with the registrar,
although the company may file it voluntarily.
7. A Memorandum of association defines the relationship between the
company and external parties. On the contrary, articles of association
govern the relationship between the company and its members and
also between the members themselves.
8. When it comes to scope, the acts performed beyond the scope of
memorandum are absolutely null and void. In contrast, acts done
beyond the scope of articles can be ratified by unanimous voting of all
shareholders.

Conclusion

Memorandum and Articles are the two very important documents of the
company, which are to be maintained by them as they guide the company
on various matters. They also help in the proper management and
functioning of the company throughout its life. That is why every company
is required to have its own memorandum and articles.

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