MOA and AOA – Most Important Documents of Every Company
Don’t you think there must be some “Better than I thought of” kind of benefits why so many people choose Private Limited Company over so many other types of registrations out there?
426+ Clients Served Globally
Read More
Called on Sunday evening to help me with trademark
registration and Udyog buddy team filled it in less than 24
hrs.
One phone call and few messages back and forth and the
work was done.
Outline
For any entrepreneur, starting a new firm is an exciting experience. When you’re preparing to give your company a legal identity, the trip is exciting and fascinating. Following the start of a business, an entrepreneur’s mind is filled with numerous amazing ideas.
Companies are governed by legal documents that spell out the dos and don’ts of running a business. Memorandum of Association (MOA) and Articles of Association (AOA), known as company charters, outline a firm’s scope of operation and internal management.
One of the most important procedures in the formation of a Private Limited Company and Public limited company is the preparation of these documents.
What are MOA and AOA?
The Memorandum and Articles of Association are the most important legal documents that make up the company’s constitution.
They are essential, and a company’s foundation is built on them. As a result, drafting them necessitates extreme precision and clarity.
Following the government’s registration of the Company, the owner must accept the dos and don’ts of the corporation’s legal requirements. Any permitted business is governed by the MoA and AoA.
These are the primary documents that aid in the supervision and maintenance of a company’s operations.
The Memorandum of Understanding is also known as the firm charter paper. As a result, the creation of a Memorandum of Agreement (MoA) and article of association (AoA) might be considered the most important stage in the formation of a company.
Let’s take a look at what article of association and memorandum of association mean and why they’re important.
Memorandum of Association
The Memorandum of Association is the company’s founding document, which is created at the time of registration and revised on a regular basis to reflect changes, if any. It is a legal document that establishes the company’s cornerstone.
The document imposes restrictions on the company’s operations. During the incorporation procedure, a Memorandum of Agreement is required.
As a result, when designing the MOA, extreme precision and clarity are required.
It comprises all of the basic information about the business and its location, as well as the established scope of business operations and objectives, the scope of authority, the company’s legal rights, and all other information required to register the firm.
It’s also known as the Charter, and it’s required to be drafted and filed as part of the Registration Compliance process.
A memorandum may take any of the forms listed in Tables A, B, C, D, and E of Schedule 1 under Section 4(5) of the Companies Act,2013. Because of the various types of businesses, the tables are of various types.
The memorandum of association (MOA) contains 6 clauses
Name clause – It includes the official company name as well as the type of business (public or private). Only the name indicated in the Memorandum of Agreement is used in the business.
Situation Clause – This clause specifies the full address of the company’s corporate headquarters.
Object Clause – The MOA must specify the company’s aims for which it was formed. It addresses the company’s primary and secondary goals.
Capital clause – The amount of capital with which the firm was registered is stated in the capital clause. This clause describes the shareholding arrangement, including who the shareholders are and how many shares they own.
The liability clause –This clause specifies whether each of the members’ responsibility is limited or unlimited. In the event of the company’s liquidation, this clause will specify the sum that each member will be responsible for.
Association and Subscription Clause – In the case of a public limited company, at least 7 members must subscribe to the memorandum, whereas in the case of a private business, at least 2 must subscribe.
