When you register a company, there are a few important documents that lay the foundation of your business structure. Among them, the MOA (Memorandum of Association) and AOA (Articles of Association) play the most crucial role. If you are planning to start a company in India or abroad, understanding these two documents is a must.
In this blog, we’ll break down what is MOA, what is AOA, and the difference between them in a simple and easy-to-understand way.
What is MOA (Memorandum of Association)?
The Memorandum of Association is a legal document that defines the scope and purpose of a company. It acts as the charter of the company and outlines what the company is permitted to do.
Key Features of MOA:
- States the name of the company.
- Defines the objectives and purpose of the business.
- Specifies the registered office address.
- Mentions the liability of members (limited by shares, limited by guarantee, or unlimited).
- Provides details of the share capital.
What is AOA (Articles of Association)?
The Articles of Association is another essential document that lays down the rules and regulations for internal management of the company. While MOA defines the external scope, AOA governs how the company will operate internally.
Key Features of AOA:
- Describes the rights and duties of directors and shareholders.
- Lays down the rules for issuing shares and transferring shares.
- Mentions the process of holding board meetings and general meetings.
- Specifies how dividends are distributed.
- Provides rules for borrowing powers and voting right
Difference Between MOA and AOA
| Basis | MOA (Memorandum of Association) | AOA (Articles of Association) |
|---|---|---|
| Meaning | Defines the objectives and scope of the company. | Defines the rules and regulations for internal management. |
| Nature | It is the charter of the company. | It is the rulebook of the company. |
| Importance | Must be filed during company registration. | Can be customized as per company needs. |
| Alteration | Harder to alter – needs approval from shareholders and sometimes authorities. | Easier to alter compared to MOA. |
| Purpose | Explains what a company can do. | Explains how a company will do it. |
Why are MOA and AOA Important?
- Legal Requirement – Both documents are mandatory for company registration.
- Clarity of Objectives – MOA defines the purpose of the company clearly.
- Smooth Operations – AOA ensures proper governance and avoids internal conflicts.
- Investor Confidence – Clear MOA & AOA boost transparency for shareholders and investors.
Conclusion
In short, the MOA defines the vision and boundaries of the company, while the AOA sets the rules and day-to-day functioning. Together, they form the backbone of any registered company.
If you are planning to start a business, ensure your MOA and AOA are drafted carefully as they will guide your company’s legal standing and internal management for years to come.