Compare/Contrast essay on Memorandum of Association and Articles of Association.

Just like personal documents of an Individual, do you know Company has its own documents
that define it? Apart from PAN, GST or certificate of Incorporation, there are two more basic
important documents of the Company. Memorandum and Articles of the Company are essential
documents of the company that defines powers, objects and rules. As per the characteristics,
Memorandum of Association prevails over the provisions of Articles of Association.

Memorandum of Association is a charter documents of the Company. It contains

information of powers and objects of the Company. Moreover, MOA (Memorandum of Association)
has six clauses which describes name, office, capital, liability, object and subscription clause. Any act
committed by company beyond powers mentioned in the MOA is void. Whereas, Articles of
Association is subordinate document to the Memorandum, containing information of internal rules
and regulations of the company. It is drafted according to the requirements of the Company’s
Internal management. Any act beyond scope of the AOA (Articles of Association), can be rectified by
shareholders. In case of conflict between MOA and AOA, MOA will prevail over AOA.

Memorandum of Association is drafted as per compliance with Companies Act, 2013.

Companies Act, 2013 governs the provisions of MOA and apparently it is subordinate to the
companies Act. Articles are prepared in line with the provisions i.e. objects and powers of the
company. Thus, memorandum governs the provisions of AOA. Apparently, AOA subordinates to the
MOA. Further, it shows how it relates with the outsiders and members.

Memorandum of Association defines the relations between outsiders and the company.
After incorporation of a company, MOA becomes public document; which any outsider before
entering into any contract with the company, assumed to have gone through it. Articles of the
company defines the relations between company and its members. As it regulates the internal
management of the company, outsiders have no knowledge of it. in case of any contract entered
with the company, outsiders can assume that Internal management is proper.

In conclusion, both the documents define what is the scope of powers and rules of the
company and both are complementary to each other. Both the documents maintain the interest of
stakeholders. As the scope of MOA is wide, AOA subsidies it.