Memorandum of Association and Article of Association Differences
The memorandum of association is a document that contains all the bylaws and the regulations of the companies it is just like a bible of the company. The memorandum of association is necessary for the incorporation of any company in India, on the other hand, the article of association is a document containing all the rules and the regulations of the company which has registered itself in India and are governed by that.
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The memorandum and article of association act as a charter to the companies through which the companies are regulated in India.
Memorandum of Association vs Article of Association Infographics
Let’s see top differences between Memorandum of Association vs Article of Association.
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Key Differences
- The memorandum of association talks about the powers and the objectives of the company and it describes in detail what is the limitation of a company and what are the powers within which the company can operate in a given scenario. On the contrary, the article of association talks about the rules of the company which generally an emphasis on the internal controls and the governing of the company
- The memorandum of association once registered and submitted with the registrar of the companies’ act cannot be changed and amended within the bylaws of the company. On the other hand, the article of association can always be altered and amended as the scope of the internal procedures and controls of the company can always be changed retrospectively.
- The memorandum of association is always necessary and vital and is required within the jurisdiction of the companies act, on the other hand, the article of association is not always necessary to be made and submitted to the ROC act in order for a company to get registered.
Comparative Table
| Memorandum of Association | Article of Association | |
| The memorandum of association is defined in the companies act section 2 subsection 56 | The article of association is very well defined in the companies act section 2 subsection 5 | |
| The memorandum of association must contain six clauses namely object clause, name clause, domain clause and etc. | The article of association is drafted and designed as per the choice of the company and it is also not necessary that the article of association should always be submitted in order to get a company registered | |
| The memorandum of association defines the relationship between the company and the outsider’s clients which the company needs to serve. It always guides the relation between and the company and the outsiders which the company is dealing with | The article of association regulates and directs the internal procedures of the company and its members and the limitation of each member. The article of association mainly emphasis on how well the company is managed internally and how it is governed through its internal policies which are made at the time of incorporation | |
| The memorandum of association is an obligatory part of the document in the companies act and it is an obligation on the part of the directors to draft the memorandum of association for a company | A public company which is limited by shares if it does not have its own article of association can adopt Table A present in the companies act instead of the article of association | |
| The memorandum of association does not allow the company to act beyond its scope which is laid in the MOA submitted at the time of the registration of the company | The article of association can be later easily ratified by the shareholders of the company. |
Conclusion
Every company in the companies’ act should amend and draft these two documents which are vital and necessary before the company commences its operations. These two documents are what every director and the founder of the company should look forward to, as these documents will pave the path on how it’s company should look like in future and what are the internal policies and the procedures that the directors need to lay down when the company is incorporated in order to lay down the future of the company.
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