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Difference Between MOA and AOA: Complete Guide with Examples
Understand the difference between MOA and AOA: what each document covers, which sections of the Companies Act govern them, and how they work together to define your company. Get expert help to draft or amend either document correctly.
Quick answer: The Memorandum of Association (MOA) is a company's charter document that defines its name, objects, registered office, liability and capital, and governs its relationship with the outside world. The Articles of Association (AOA) is the internal rulebook that governs day-to-day management, such as director powers, meetings, share transfers and dividends. MOA is governed by Section 4 of the Companies Act, 2013 and AOA by Section 5. Both are mandatory at incorporation, and the MOA has higher authority: the AOA must always stay within the limits the MOA sets.
What Is a Memorandum of Association (MOA)?
The MOA is the foundational charter of a company. It states what the company is formed to do and sets the outer limits of its powers. Anything a company does outside its MOA is called an ultra vires act, and such an act is void and cannot be validated later, even with shareholder approval.
Under Section 4 of the Companies Act, 2013, every MOA must contain these clauses:
- Name clause: The company's legal name, ending in "Limited" for a public company or "Private Limited" for a private company.
- Registered office clause: The state in which the registered office is situated.
- Objects clause: The objects for which the company is formed and matters necessary to achieve them.
- Liability clause: Whether members' liability is limited by shares, limited by guarantee, or unlimited.
- Capital clause: The authorised share capital and how it is divided into shares.
- Subscription clause: Details of the initial subscribers and the shares each has agreed to take.
What Is an Articles of Association (AOA)?
The AOA is the internal rulebook that governs how the company runs on a day-to-day basis, within the boundaries set by the MOA. It is subordinate to the MOA: if the two conflict, the MOA prevails and the AOA cannot exceed it.
Under Section 5 of the Companies Act, 2013, the AOA typically covers:
- Powers, duties and appointment of directors
- Share allotment, calls on shares and transfer or transmission of shares
- Procedure for board meetings and general meetings
- Voting rights of members
- Declaration and payment of dividends
- Borrowing powers and accounts and audit matters
- Entrenchment provisions under Section 5(3), which make specified clauses harder to alter than a normal special resolution would allow
Companies limited by shares may adopt the model articles in Table F of Schedule I of the Companies Act, 2013, or draft custom articles suited to their needs.
MOA vs AOA: Detailed Comparison
| Basis | Memorandum of Association (MOA) | Articles of Association (AOA) |
|---|---|---|
| Meaning | Charter document defining the company's objects and scope | Rulebook governing internal management |
| Governing section | Section 4, Companies Act, 2013 | Section 5, Companies Act, 2013 |
| Relationship governed | Company and outsiders | Company and its members |
| Status | Supreme charter document | Subordinate to the MOA |
| Contents | Name, registered office, objects, liability, capital, subscription | Directors, meetings, share transfer, dividends, borrowing powers |
| Effect of breach | An ultra vires act is void and cannot be ratified | An act beyond the articles can often be ratified by members |
| Alteration | Special resolution under Section 13, sometimes with regulatory approval | Special resolution under Section 14 |
| Entrenchment | Cannot contain entrenchment provisions | May include entrenchment provisions under Section 5(3) |
| Flexibility | Rigid; changes need formal procedure | More flexible and easier to tailor to the company's needs |
| Mandatory | Compulsory for every company | Compulsory; model articles may be adopted |
How MOA and AOA Work Together
MOA sets the boundary
It answers "what can this company do?" It fixes the company's name, objects, capital and liability, and defines its identity to the outside world, including regulators, lenders and other companies it deals with.
AOA fills in the detail
It answers "how does this company run itself?" It sets out board procedures, member rights and share matters, as long as those rules stay within what the MOA permits.
Think of the MOA as the company's constitution and the AOA as its by-laws. You need both at incorporation, and any conflict is always resolved in favour of the MOA.
How to Alter the MOA or AOA
- Altering the MOA: Requires a special resolution under Section 13. Changing the objects clause or the registered office state can also require approval from the Registrar of Companies or the Central Government, depending on what is changed.
- Altering the AOA: Requires a special resolution under Section 14. This is generally simpler than altering the MOA, unless the clause being changed has an entrenchment provision.
If your company needs to update its incorporation documents, our team can guide you through the resolution and filing process. Also see our guide on ROC return filing for a private limited company, since MOA and AOA amendments are also filed with the ROC.
How Setup Filing Can Help
Setup Filing has served 50,000+ customers with company incorporation, drafting and ongoing compliance. Share your requirement on WhatsApp and our team will guide you on the right next step.
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Drafting of the objects clause, capital clause and custom articles suited to your business.
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Help with special resolutions and filings to alter your MOA or AOA.
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Ongoing support
Direct WhatsApp support on +91 9818209246 for your compliance questions.
Explore more Setup Filing registration and compliance services, or read about what a Detailed Project Report (DPR) covers if your company also needs a report for a bank loan.
Frequently Asked Questions About MOA and AOA
What is the main difference between MOA and AOA?
The MOA defines a company's objects and scope of activity, while the AOA governs its internal rules and day-to-day management.
Which sections of the Companies Act govern MOA and AOA?
The MOA is governed by Section 4 and the AOA by Section 5 of the Companies Act, 2013.
Which document has higher authority, MOA or AOA?
The MOA has higher authority. If the AOA conflicts with the MOA, the MOA prevails and the AOA cannot go beyond it.
What are the clauses of the MOA?
The MOA has six clauses: name, registered office, objects, liability, capital and subscription.
What does the AOA typically contain?
The AOA usually covers director powers, share transfer rules, meeting procedures, voting rights, dividend policy and borrowing powers.
What is an ultra vires act?
It is an act done beyond the objects stated in the MOA. Such an act is void and cannot be ratified, even by the shareholders.
Can an act beyond the AOA be corrected?
Yes, an act beyond the articles can often be ratified by the members, unlike an act beyond the MOA.
How do you alter the MOA or AOA?
Altering the MOA needs a special resolution under Section 13, sometimes with regulatory approval. Altering the AOA needs a special resolution under Section 14.
Are MOA and AOA mandatory for every company?
Yes. Every company must have both documents at the time of incorporation.
How can I get help drafting my company's MOA or AOA?
Send your company details to Setup Filing on WhatsApp at +91 9818209246 and our team will guide you on drafting or amending these documents.
This page is general information and not legal advice. Please consult a qualified professional for your specific company's documents.
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