What is AOA and MOA?

AOA and MOA are the two foundational legal documents required for the incorporation and governance of a company, particularly in jurisdictions following common law, like India.¹

Here is a breakdown of what each document is and how they differ:

1. MOA: Memorandum of Association

The MOA is considered the main document and the constitution of the company.² It defines the company's relationship with the outside world and establishes its fundamental parameters.³

Purpose and Scope (The "What" and "Why")

• External Focus: Defines the company's charter and its relationship with external parties (shareholders, creditors, the public).⁴

  
  

• Fundamental Limits: Sets the absolute boundaries for what the company can and cannot do.⁵ Any act done outside the scope of the MOA is considered ultra vires (beyond powers) and is void.⁶

  
  

• Supremacy: It is subordinate only to the Companies Act and prevails over the AOA in case of any conflict.

Key Mandatory Clauses (The Six Pillars)

The MOA typically includes the following essential clauses:

1. Name Clause: The legal name of the company.⁷

   
   

2. Registered Office Clause: The state/region where the company's official office is located.⁸

   
   

3. Object Clause: Defines the main business and secondary objectives for which the company is incorporated.⁹

   
   

4. Liability Clause: States the liability of the members (e.g., limited by shares or guarantee).¹⁰

   
   

5. Capital Clause: Specifies the authorized share capital of the company.¹¹

   
   

6. Subscription Clause: The names of the initial subscribers/founders and the number of shares they agree to take.¹²

   
   

2. AOA: Articles of Association

The AOA is the company's internal rulebook.¹³ It contains the rules and regulations for the internal management and day-to-day running of the company.¹⁴

Purpose and Scope (The "How")

• Internal Focus: Governs the internal affairs of the company and the rights, duties, and powers of its members and directors.¹⁵

  
  

• Operational Procedures: Lays down the procedures for how the company will achieve the objectives defined in the MOA.¹⁶

  
  

• Subordinate: It is subordinate to both the Companies Act and the MOA.¹⁷

  
  

Typical Contents (The Rulebook)

The AOA includes detailed provisions on matters such as:

• Issuance and transfer of shares.

• Conduct of Board Meetings and Annual General Meetings (AGM).¹⁸

  
  

• Appointment, remuneration, and powers of Directors.¹⁹

  
  

• Declaration and payment of dividends.²⁰

  
  

• Auditing of accounts.

⚖️ Key Differences at a Glance

Feature	Memorandum of Association (MOA)	Articles of Association (AOA)
Focus	External (Company and the outside world)	Internal (Company and its members/directors)
Status	The Constitution / Primary document	The Rulebook / Subsidiary document
Relationship	Defines the scope and powers of the company.	Regulates the manner in which the powers are exercised.
Ultra Vires	Acts beyond MOA are void and cannot be ratified.	Acts beyond AOA can often be ratified by shareholders.
Alteration	More difficult (requires Special Resolution and sometimes Central Government approval).	Comparatively easier (requires a Special Resolution).

In simple terms, the MOA sets the house's foundation and defines its external limits, while the AOA contains the furniture, internal rules, and procedures for living in the house.²¹

Would you like to know more about the specific clauses in either the MOA or the AOA?