Indroduction
The relation between Memorandum of Association and Articles of Association is vital for understanding a company’s legal structure. Memorandum of Association (MOA) and Articles of Association (AOA) are essential legal documents of any company. The MOA serves as the foundation, defining the company’s structure and purpose. It outlines the basic terms on which the company is registered and given a certificate of incorporation. The MOA sets the scope, objectives, and rights of the company and acts as its constitution. The company must operate within the terms specified in the MOA, and actions outside its scope are considered “ultra vires” (beyond its powers). The MOA governs the company’s external dealings.
Read More: Memorandum and Articles are Public Documents. Explain this Statement
The AOA, on the other hand, focuses on the internal operations of the company. It provides detailed rules and regulations for managing day-to-day activities, all aimed at fulfilling the objectives outlined in the MOA. The AOA cannot contradict or override the provisions of the MOA. It complements the MOA, ensuring the smooth functioning of the company’s internal processes.
Key Points
- 1. Articles are Governed by the Memorandum: The AOA cannot grant rights or powers to the company that are not already defined in the MOA. Any rights that contradict the MOA are invalid.
- 2. Articles Complement the Memorandum: Both the MOA and AOA should be read together as they complement each other. The AOA lays out internal rules to help achieve the goals stated in the MOA.
- 3. Articles Cannot Change the Memorandum: The MOA is a superior document to the AOA. The AOA cannot alter or override the terms of the MOA.
Read More: Understanding Memorandum of Association: Key Clauses & Common Alterations
Conclusion
In conclusion, the MOA is the primary document outlining the company’s external structure, while the AOA governs its internal operations. Both documents are registered simultaneously and must be considered together for a complete understanding of a company’s governance. The Relation between Memorandum of Association and Articles of Association ensures that the company operates within its legal framework, with the MOA setting the overall direction and the AOA managing internal processes. Together, they form the foundation for effective corporate management and legal compliance.