Differentiate your views on memorandum of association and articles of association?

Answer 1

1) MoA:

It is along with the application of starting of a company.

I think it confines & defines the objective of a company.

MoA is also called Charter of a Company.

The main aim of MoA is to let the investors know where their money is invested.

It has 2 objectives; Main Objective & Subsidiary Objectives.

MoA has 6 clauses:

@ The Name Clause

@ The Registered Office Clause

@ The Object Clause

@ The capital Clause

@ The Liability Clause

@ The Association Clause.

2) AoA:

It is internal management of the company.

It shows what type of power / responsibilities / authority the investors have..

Its by laws that governs management of internal affairs defines duties / rights / powers / number of directors of the company.

It also show that what is mode & form in which business is to be carried out subordinating to MoA & can not supersede object set by MoA.

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MEMORANDUM OF ASSOCIATION AND ARTICLES OF AS SOCIATION

The Memorandum of Association and the Articles of Association are two important basic documents of a company, which together form the constitution of a Company. Both serve different functions and purposes and therefore, are important for different classes of people, who deal with the company. These two documents lay down the boundary within which the Company can operate.

The Memorandum of Association, often simply called the Memorandum, is also called the Charter of a Company and is useful to investors to know what are the objectives of the company, amount of authorized share capital, whether the liability of the members is limited or not, how the company invests the money and utilize it, how it will work according to objectives incorporated in it, etc. It is the document that is required to be filed with the Registrar of Companies for incorporating a company. This document defines the relationship between the company and the outsiders. Anything done ultra vires the Memorandum (i.e., beyond the legal capacity) is void against the company. Subsequently, it cannot be ratified even by the share holders at a General Body meeting. The Memorandum is a public document and can be inspected by any one at any time, usually at the public office, - the Registrar of Companies - where it is lodged.

The Articles of Association of a company or simply the Articles contains rules and regulations, which govern the internal management of the Company. The Article of Association is subordinate to the Memorandum. Therefore, any provisions of the Articles which go against or beyond the provisions of Memorandum are null and void. The Articles of a company contains the organization and its control, issue of shares, voting rights of different classes of share holders, Director's powers, the appointment of directors, the director's meetings, the quorum and percentage of vote, transferability of shares, the dividend policy, winding up, etc. The Articles is binding not only on the existing members, but also on the future members who may join in future. The Article binds the company and its members as soon as they sign the document, as it is a contract between the company and its members. Just like a Company has certain obligations towards the members, so also members have certain rights and duties to perform towards the company for smooth functioning of the company.

M.J. SUBRAMANYAM, XCHANGING, MUMBAI

Answer 2

Both the Memorandum of Association and the Articles of Association are very important documents for any type of company be it a public-limited company or a private-limited company. For a company, a Memorandum is the constitution of the charter of the company. In other words, a Memorandum defines and confines the power of the company. As for the Articles of Association, they are the by-laws of the company that give an explanation to the Memorandum. While the Memorandum regulates the interaction of the company with the external world, the Articles of Association are responsible for the internal conduct of the company. Also registration of the Memorandum is compulsory for every company. On the other hand, registration of Articles of Association is not compulsory for a company that is limited by shares. Such a company may adopt Table A in place of Articles of Association. In addition to that, a Memorandum is sub-ordinate to only the Company's ordinance 1984 while the Articles of Association are sub-ordinate to both the Memorandum and the Articles of Association.

Answer 3

short note private company & public company