Company Registration

Every company in India emanates from two constitutional documents. These are Memorandum of Association (MoA) and Articles of Association (AoA) of a company. MoA means what (activities) to do, and AoA means how (internal rules) to do. If you’re completing a company registration, these are not just forms to sign and forget. They decide your company’s objectives, its powers, and the rules your directors and shareholders must follow. This guide explains what each document means, the clear difference between MOA and AOA, why both matter, and how they can be changed — in plain language for Indian founders. What is MOA (Memorandum of Association)? The Memorandum of Association is the company’s charter document. It defines the company’s identity, its objectives, and its relationship with the outside world — shareholders, creditors, and regulators. It is governed by Section 4 of the Companies Act, 2013, and can be accessed on the website of Ministry of Corporate Affairs (www.mca.gov.in) under “View Public Documents” In simple terms, the MOA answers one question: what is this company allowed to do? Anything done outside this scope is treated as ultra vires (beyond the company’s powers) and has no legal effect. Key features of MOA Defines the company’s objectives and the scope of its activities. Mandatory for every company, whatever its size or type. Available as a public document on the MCA portal Alteration of any clause by passing a special resolution at any general meeting of the company The clauses (contents) of the MOA The MOA is divided into six clauses: Name Clause — the company’s approved name, ending in “Private Limited” or “Limited”. Registered Office Clause — the state in which the company’s registered office is situated. Object Clause — the main and ancillary activities the company can carry. This is the heart of the MOA. Liability Clause — Limited liability of members (limited to their shareholding). Capital Clause — the authorised share capital– Maximum capital amount (nominal value) that can be raised by a company Subscription Clause — the first subscribers to the MoA,, the shares they agree to take, and their personal details. What is AOA (Articles of Association)? The Articles of Association is the company’s internal rulebook. It lays down how the company will actually be run — how meetings are held, how directors are appointed, how shares move, and how decisions are made. It is governed by Section 5 of the Companies Act, 2013. The AOA answers a different question: how will this company operate from the inside? Importantly, the AOA is subordinate to the MOA — it must work within the boundaries the MOA sets and cannot contradict it. Key features of AOA Regulates the company’s internal management and governance. Mandatory for all companies, private and public. More flexible — Alteration of any Article by passing a special resolution at any general meeting of the company Often based on a model template, such as Table F for a company limited by shares. What the AOA contains Procedures for board meetings, general meetings and resolutions. Appointment, powers and duties of directors. Rules for the transfer and transmission of shares. Dividend declaration and distribution. The company’s borrowing powers. Voting and proxy rules, and the procedure for winding up. In a private limited company, shares are not freely transferable and limit of number of members shall not exceed 200. Difference between MOA and AOA Both are very important constitutional documents. The table below sets out the difference between MOA and AOA across the points that matter most. Point of difference MOA (Memorandum of Association) AOA (Articles of Association) Meaning The company’s charter, defining its objectives and external relationships The internal rulebook for managing the company Governing section Section 4, Companies Act, 2013 Section 5, Companies Act, 2013 Scope External — company’s dealings with the outside world Internal — day-to-day management Supremacy Supreme document; the AOA cannot override it Subordinate to both the Act and the MOA Structure Six fixed clauses Articles, often based on a model like Table F Acting beyond it Any act beyond the MOA is ultra vires and void Acts beyond the AOA can usually be ratified by members Ease of change Alteration by passing a special resolution and subject to issue of relevant certificate by the Registrar a special resolution is enough Public access Public document, available via the MCA/ROC records Public document, available via the MCA/ROC records In one line: The simplest way to remember the difference between memorandum of association and article of association: the MOA says what the company can do, while the AOA says how the company does it. The doctrine of ultra vires (why the MOA’s limits matter) “Ultra vires” simply means “beyond the powers”. If a company does something outside its object clause, that act is treated as void — even if every shareholder agreed to it. This rule protects shareholders and creditors by making sure the company sticks to the purpose it was set up for. It’s the main reason the object clause of the MOA deserves careful drafting. Why MOA and AOA are important These are company’s primary constitutional documents and helps stakeholders to take an informed decision before entering into any dealings with a company. How to access a company’s MOA and AOA Since both are public documents, you can view any registered company’s MOA and AOA through the Ministry of Corporate Affairs (MCA) portal under Services tab under “View Public Documents”. Search the company on the MCA/ROC records and pay the prescribed fee to obtain copies. If you’re at the naming stage of your own company, it also helps to first set up the right business structure and get your incorporation documents in order before these are drafted and filed. Need help drafting your MOA and AOA? Getting your MOA and AOA right the first time is particularly important when setting up a wholly owned subsidiary in India, as it saves costly amendments later. LegalJini’s Company Secretaries and legal experts draft both documents to match your business objectives