MOA vs AOA
MOA and AOA stand for memorandum of association and articles of association respectively and are important source of information for shareholders and other stakeholders in a company that has been duly incorporated. These are documents that are necessary at the time of formation of a company and must be deposited with the registrar of companies who approves the incorporation of the company. Though there are similarities, there are differences between MOA and AOA that need to be highlighted for the benefit of all those who are stakeholders in a company or are potential investors as these documents reveal a lot about a company.
MOA is the document that reveals the name, registered office address, aims and objectives of the company, clause about its limited liability, share capital, minimum paid up capital etc. MOA also gives information about its first shareholders including the number of shares subscribed by them. MOA is one document that tells people all about the company and its relationship with the outside world. Though it is essential to submit MOA with the registrar when a company is being formed, it does not find mention in the constitution of the company. Subsequent to an amendment added in 2006 Companies Act, it is no longer mandatory to include the details about name, address, objectives and first shareholders names. Hence there is no restriction upon a company to engage in a particular business.
Articles of Association, also simply referred to as Articles, are necessary to be submitted during incorporation of a company with the registrar of companies. When Articles are taken in conjunction with MOA, they form what is called as the constitution of the company. Though there are differences in these articles as to their requirements in different countries, in general AOA is a document that provides following information about the company.
• The manner in which shares have been distributed along with voting rights attached with different classes of shares
• Estimate of intellectual property rights
• The list of directors with shares allotted to each
• Schedule of the meetings of the board of directors along with the quorum required with percentage of votes with directors
• Chairman’s special voting rights and the manner in which he is elected
• How profits are distributed through dividends
• How the company can be dissolved
• Secrecy of know-how and how it is managed
• How shares can be transferred, and so on.
Difference Between MOA and AOA
• As can be seen with the above discussion, both AOA and MOA are important documents that are necessary to be submitted with the registrar at the time of incorporation of a company
• MOA is the Charter of the company that outlines the nature of the business, aims and objectives whereas AOA outlines the rules and regulations for internal management in doing the business.
• While MOA is a must for all the companies, AOA is not so; it’s not a must for companies limited by shares to have its own AOA
• MOA is the supreme document for a company AOA shall not violate MOA
• Alteration of MOA is restricted while AOA can be altered through a special resolution
• Though both AOA and MOA reveal information about the company, it is AOA that is of particular interest for shareholders and potential investors
• Taken together MOA and AOA are referred to as Constitution of the company.
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