⚠️ Disclaimer: This resource is for educational purposes only and does not constitute legal advice.
LL.B. Paper 6.2 | Company Law
Memorandum & Articles of Association
As per the Companies Act, 2013 & Companies Rules | Chapter II | Sections 4, 5, 6, 9, 10, 13, 14, 15, 17
📌 Overview – MOA & AOA at a Glance
The Memorandum of Association (MOA) and Articles of Association (AOA) are the two foundational constitutional documents of every company under the Companies Act, 2013. They define what the company is and how it operates.
🔑 Golden Rule: MOA = External Constitution (what the company CAN do). AOA = Internal Constitution (HOW the company is managed).
📊 Quick Comparison Table
| Aspect | MOA (Memorandum) | AOA (Articles) |
|---|---|---|
| Governing Section | Section 4 | Section 5 |
| Definition | Section 2(56) | Section 2(5) |
| Nature | Charter / External Constitution | Internal Bye-laws / Regulations |
| Purpose | Defines objects & scope | Governs day-to-day management |
| Priority | Subordinate to Act only | Subordinate to Act AND MOA |
| Form / Schedule | Tables A–E of Schedule I | Tables F–J of Schedule I |
| Alteration | Sec 13 – Special Resolution ± NCLT | Sec 14 – Special Resolution generally |
| Binding Effect | Section 10 – Binds company & all members as statutory contract | |
| Copies to Members | Section 17 – Within 7 days of request | |
| Example | Tata Steel MOA states it can engage in steel manufacturing | Tata Steel AOA governs board meetings, voting rights, dividends |
📋 MOA – Key Points (Quick Bullets)
- Section 4(1) – Must contain: Name Clause, Registered Office Clause, Objects Clause, Liability Clause, Capital Clause (+ Nominee Clause for OPC).
- Name Clause – Last word must be "Limited" (public); "Private Limited" (private) [Section 4(1)(a)].
- Objects Clause – Defines legal scope; acts beyond this are ultra vires and void [Section 4(1)(c)].
- Liability Clause – States whether liability is limited by shares, guarantee, or unlimited [Section 4(1)(d)].
- Capital Clause – Authorised share capital; each subscriber must take minimum 1 share [Section 4(1)(e)].
- Form – MOA must follow Tables A, B, C, D or E of Schedule I [Section 4(6)].
- Alteration – By Special Resolution; some clauses need Central Government/NCLT approval [Section 13].
- Binding – MOA binds company and members like a signed contract [Section 10(1)].
📋 AOA – Key Points (Quick Bullets)
- Section 5(1) – AOA contains regulations for the management of the company.
- Model Articles – Company may adopt all or any part of Model Articles [Section 5(7)].
- Entrenchment – AOA can have entrenchment provisions making certain clauses harder to alter [Section 5(3)].
- Alteration – By Special Resolution only; file with RoC within 15 days [Section 14(1)].
- Section 14(2) – Converting public company to private company needs NCLT approval.
- Binding Effect – Binds company and members as a statutory contract [Section 10].
- Copies – Every member is entitled to get a copy within 7 days of request [Section 17].
- Alteration Noted – Every altered copy must note the date of alteration [Section 15].
📊 Detailed Section-wise Reference Table
| Section / Rule | Concept | Meaning | Key Points | Example |
|---|---|---|---|---|
| Sec 2(56) | Definition – MOA | MOA as originally framed or altered under this Act | Foundation charter document; defines company's identity | Infosys MOA states objects like IT services, consulting |
| Sec 4(1)(a) | Name Clause | Company must use "Limited" or "Private Limited" as last words | Cannot be identical to existing company name | "Reliance Industries Limited" – "Limited" is mandatory |
| Sec 4(1)(b) | Registered Office Clause | State where registered office is situated | Determines which RoC has jurisdiction | "Registered office in the State of Maharashtra" |
| Sec 4(1)(c) | Objects Clause | Objects for which company is incorporated | Company cannot act beyond objects (ultra vires) | Car manufacturer cannot start banking operations |
| Sec 4(1)(d) | Liability Clause | Extent of member's liability | Limited by shares, guarantee, or unlimited | "Liability is limited to unpaid amount on shares held" |
| Sec 4(1)(e) | Capital Clause | Authorised capital divided into shares of fixed amount | Maximum capital the company can raise | ₹10 crore divided into 1 crore shares of ₹10 each |
| Sec 2(5) | Definition – AOA | Articles originally framed or altered from time to time | Governs internal working of the company | AOA of a company specifies how directors are appointed |
| Sec 5(3) | Entrenchment in AOA | Certain clauses can be made harder to alter | More restrictive conditions than a special resolution required | AOA: "Clause 7 cannot be changed unless 90% members agree" |
| Sec 6 | Act Overrides MOA/AOA | Companies Act prevails over any contrary MOA/AOA provision | MOA/AOA provisions repugnant to Act become void | AOA giving directors unlimited powers is void |
| Sec 10 | Binding Effect | MOA and AOA bind company and members as a contract | Monies payable under MOA/AOA are debts | Member bound to pay call money as per Capital Clause |
| Sec 13 | Alteration of MOA | Alter MOA by special resolution | Registered office (inter-state) needs NCLT; Name Clause needs Central Govt approval | Company moves registered office from Kolkata to Mumbai |
| Sec 14 | Alteration of AOA | AOA altered by special resolution | Public to Private conversion needs NCLT approval | Company increases maximum directors from 12 to 15 |
| Sec 15 | Alteration to be Noted | Every copy of MOA/AOA must reflect all alterations | Penalty: ₹1,000/day, max ₹1 lakh for non-compliance | After altering AOA, all printed copies must show amended version |
| Sec 17 | Copies to Members | Members can demand copy of MOA/AOA | Must be supplied within 7 days; fee not exceeding prescribed limit | Wipro shareholder demands MOA copy; must be given within 7 days |
⚡ Doctrine of Ultra Vires
- If a company acts beyond its Objects Clause in MOA, it is called an Ultra Vires Act.
- Such acts are void and cannot be ratified even if all shareholders agree.
- Under Companies Act 2013, a company can alter its Objects Clause under Section 13 to cure this in future.
📌 Landmark Case — Ashbury Railway Carriage & Iron Co. Ltd. v. Riche (1875): Company formed for manufacturing railway carriages gave a contract for building a railway line. Held: This act was ultra vires and void — the company could not ratify it.
📄 Memorandum of Association (MOA)
The Memorandum of Association is the supreme charter of the company. It defines the company's relationship with the outside world and the limits of its powers. No company can act beyond its MOA — such acts are ultra vires and void.
📌 Legal Provisions: Section 4 (Content) | Section 2(56) (Definition) | Section 13 (Alteration) | Schedule I Tables A–E
1. Meaning & Definition [Section 2(56)]
- Section 2(56) defines "memorandum" as the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act.
- Also called the "Constitution" or "Charter" of the company.
- Determines the scope of company's activities and its relationship with the outside world.
- Every company must have a MOA filed at the time of incorporation.
🔑 Exam Tip: MOA = External Document. It tells WHAT the company can do.
2. Mandatory Clauses of MOA [Section 4(1)]
Section 4(1) mandates six clauses in every MOA:
Clause 1
Name Clause [Section 4(1)(a)]
- Last word must be "Limited" for a public limited company.
- Last words must be "Private Limited" for a private company.
- Exception: Section 8 Companies (NGOs/non-profits) are exempt.
- Name must not be identical or nearly similar to an existing registered company.
- Name reservation: RoC can reserve name for 20 days (existing company: 60 days) [Section 4(5)].
📌 Example: "ABC Manufacturing Private Limited" — the suffix "Private Limited" is mandatory for a private company.
Clause 2
Registered Office Clause [Section 4(1)(b)]
- States the State (not exact address) in which the registered office is situated.
- Determines which Registrar of Companies (RoC) has jurisdiction over the company.
- Company must establish registered office within 30 days of incorporation [Section 12].
📌 Example: "Registered office in the State of Maharashtra." This means the Mumbai RoC has jurisdiction.
Clause 3
Objects Clause [Section 4(1)(c)]
- States the objects for which the company is incorporated — most critical clause.
- Defines the legal scope of company's activities.
- Acts beyond objects are ultra vires and void (Ashbury Railway case).
- Under Companies Act 2013, Main Objects + Other Objects are merged into one unified Objects Clause.
📌 Example: Objects Clause of a pharma company: "To manufacture, distribute, and sell pharmaceutical products including medicines, drugs and health supplements."
Clause 4
Liability Clause [Section 4(1)(d)]
- States whether the liability of members is limited or unlimited.
- Company limited by shares: liability limited to unpaid amount on shares.
- Company limited by guarantee: liability limited to the guaranteed amount on winding up.
📌 Example: "The liability of the members is limited to the amount, if any, unpaid on the shares held by them."
Clause 5
Capital Clause [Section 4(1)(e)]
- States the authorised / nominal capital of the company.
- Specifies division into shares of fixed amount.
- Each subscriber must take at least 1 share.
- Number of shares each subscriber agrees to take must be indicated opposite his name.
📌 Example: "Authorised Share Capital: ₹1,00,00,000 divided into 10,00,000 equity shares of ₹10 each. Subscriber A: 5,000 shares; Subscriber B: 5,000 shares."
Clause 6
Nominee Clause [Section 4(1)(f)] — OPC Only
- Applicable only to One Person Company (OPC).
- States the name of the nominee who will become member on death/incapacity of subscriber.
- Written consent of nominee must be filed with RoC at the time of incorporation.
📌 Example: "In the event of death of Mr. Rajesh Kumar (subscriber), Ms. Priya Kumar shall become the member of the company."
3. Form of MOA [Section 4(6)]
- MOA must be in the forms given in Tables A, B, C, D, and E of Schedule I.
| Table | Company Type | Share Capital? |
|---|---|---|
| Table A | Company Limited by Shares | Yes |
| Table B | Company Limited by Guarantee | No |
| Table C | Company Limited by Guarantee | Yes |
| Table D | Unlimited Company | No |
| Table E | Unlimited Company | Yes |
4. Alteration of MOA [Section 13]
- A company can alter its MOA by passing a Special Resolution at a General Meeting.
- Must be filed with RoC within 30 days of passing the resolution.
| Clause Altered | Resolution Required | Additional Approval? |
|---|---|---|
| Name Clause | Special Resolution | Central Government (RoC) |
| Registered Office (same city) | Board Resolution | None |
| Registered Office (different State) | Special Resolution | NCLT Confirmation |
| Objects Clause | Special Resolution | Filed with RoC; notice to creditors/debenture holders |
| Liability Clause (increase) | Special Resolution | NCLT approval if increasing member liability |
| Capital Clause (increase) | Ordinary Resolution | Generally none |
📌 Example: XYZ Pvt Ltd wants to shift its registered office from Kolkata (West Bengal) to Mumbai (Maharashtra). It must pass a Special Resolution AND obtain NCLT confirmation under Section 13.
5. Binding Effect of MOA [Section 10]
- When registered, MOA binds the company and every member as if each had signed it.
- Contains covenants to observe all provisions of the MOA.
- Monies payable under MOA are treated as debts due from the member to the company.
- Creates a statutory contract between company ↔ members.
⚡ Key: Section 10 makes MOA a statutory contract. Members cannot avoid obligations under it.
6. Act Overrides MOA [Section 6]
- Provisions of the Companies Act 2013 always override anything contrary in the MOA.
- Any provision of MOA repugnant to the Act becomes void.
- Legal Hierarchy: Companies Act 2013 > MOA > AOA > Board Resolutions > Ordinary Resolutions.
📌 Example: If MOA authorises issue of shares at a discount beyond limits of Section 53 of the Act, that provision is void.
7. Copies of MOA to Members [Section 17]
- Every member of a company can demand a copy of the MOA at any time.
- Company must supply it within 7 days of request.
- Fee charged must not exceed prescribed limit.
- Non-compliance = penalty for company and defaulting officer.
- Every altered copy must note the date of alteration [Section 15].
📋 Articles of Association (AOA)
The Articles of Association is the internal rulebook of the company. It governs the day-to-day internal management — how directors are appointed, how meetings are called, how voting is conducted, dividends distributed, and so on.
📌 Legal Provisions: Section 5 (Content) | Section 2(5) (Definition) | Section 14 (Alteration) | Schedule I Tables F–J
1. Meaning & Definition [Section 2(5)]
- Section 2(5) defines "articles" as the articles of association of a company as originally framed or as altered from time to time or applied in pursuance of any previous company law or of this Act.
- AOA contains regulations for the management of the company [Section 5(1)].
- Subordinate to both the Companies Act and the MOA.
- Sometimes called the "bye-laws" or "internal constitution" of the company.
🔑 Exam Tip: AOA = Internal Document. It tells HOW the company will be managed.
2. Contents of AOA [Section 5(1) & (2)]
AOA must contain regulations for management and prescribed matters. Typical contents:
| Topic | What it Covers | Example |
|---|---|---|
| Share Capital | Types of shares, rights attached | Equity vs Preference shares, voting rights |
| Transfer of Shares | Procedure for transfer, restrictions | Private company: Board approval needed for transfer |
| General Meetings | AGM, EGM, notice period, quorum | AGM within 6 months of financial year end |
| Voting Rights | Who can vote, how to vote, proxy | One share = one vote on poll |
| Board of Directors | Appointment, removal, powers, meetings | Max 15 directors; Board meeting every quarter |
| Dividends | Declaration and payment procedure | Final dividend declared at AGM; interim by Board |
| Accounts & Audit | Maintenance of accounts, audit | Statutory audit mandatory; accounts placed at AGM |
| Winding Up | Voluntary winding up procedure | Special resolution required for voluntary winding up |
| Common Seal | Use of common seal on documents | AOA may authorise use of seal on official documents |
3. Entrenchment Provisions [Section 5(3) & 5(4)]
- Entrenchment means making certain AOA clauses harder to change than usual (harder than a special resolution).
- Can be included at the time of formation or by amendment post-formation.
- Private Company (post-formation): All members must agree.
- Public Company (post-formation): Special Resolution needed.
- On making an entrenchment provision, company must give notice to RoC in prescribed form.
📌 Example: A private company's AOA states: "Clause 5 (dividend policy) can only be altered if 90% of shareholders agree in writing." This is a valid entrenchment clause under Section 5(3).
4. Model Articles [Section 5(7) & 5(8)]
- A company may adopt all or any regulations from the Model Articles applicable to its type.
- If registered AOA does not exclude or modify model article regulations, those regulations automatically apply [Section 5(8)].
- Model Articles are given in Tables F, G, H, I, J of Schedule I.
| Table | Company Type |
|---|---|
| Table F | Company Limited by Shares |
| Table G | Company Limited by Guarantee with Share Capital |
| Table H | Company Limited by Guarantee without Share Capital |
| Table I | Unlimited Company with Share Capital |
| Table J | Unlimited Company without Share Capital |
5. Alteration of AOA [Section 14]
- AOA can be altered by passing a Special Resolution at a General Meeting.
- Alteration must be filed with RoC within 15 days.
- Exception: If alteration converts a Public Company to a Private Company, NCLT approval is required [Section 14(2)].
- Alteration is valid only if it complies with the Act and does not conflict with MOA.
| Type of Alteration | Requirements | Additional Approval |
|---|---|---|
| Regular alteration to AOA | Special Resolution | File with RoC within 15 days |
| Public → Private conversion | Special Resolution | NCLT approval required |
| Entrenchment clause alteration | All members (private) or Special Resolution (public) | Notice to RoC |
📌 Example: ABC Ltd (Public Company) passes a special resolution to convert itself to a private company and amends AOA accordingly. This requires NCLT approval before it becomes effective.
6. Binding Effect of AOA [Section 10]
- AOA binds the company and all members as if each had signed it.
- Creates a statutory contract between:
- Company ↔ Members
- Members ↔ Members (through the company)
- AOA does not bind the company to outsiders (non-members).
- AOA does not bind members in their capacity other than as members (e.g. as a solicitor).
📌 Key Case — Hickman v. Kent Sheep Breeders (1915): AOA creates a contract between company and members only in their capacity as members, not outsiders.
7. AOA is Subordinate to MOA [Sections 6 & 10]
- AOA is subordinate to the MOA — AOA cannot override or go beyond MOA.
- If AOA conflicts with MOA, the MOA prevails.
- If both conflict with the Companies Act, the Act prevails.
- Hierarchy: Companies Act 2013 > MOA > AOA > Board Resolutions > Ordinary Resolutions.
📌 Example: MOA states authorised capital is ₹10 crore. AOA cannot authorise issue of shares worth ₹15 crore — that provision of AOA is void as it exceeds the MOA limit.
8. Doctrine of Indoor Management (Turquand's Rule)
- Outsiders dealing with a company are entitled to assume that all internal AOA requirements have been complied with.
- They need not inquire into the internal proceedings of the company.
- Protects bona fide third parties who rely on the apparent authority of company officers.
- Exceptions: Outsider has actual knowledge of irregularity; outsider is an insider; the act involves forgery.
📌 Landmark Case — Royal British Bank v. Turquand (1856): Company's AOA required shareholder resolution for borrowing. Bank gave loan assuming resolution was passed. Held: Bank could assume internal compliance; the company was bound to repay the loan.
📊 Flowchart 1 — MOA Preparation & Filing Process
📊 Flowchart 2 — AOA Alteration Process [Section 14]
🧠 Mind Map — MOA & AOA under Companies Act, 2013
Complete conceptual map showing all key branches at a glance.
🗺️ Study Roadmap — MOA & AOA | Companies Act, 2013
A structured 5-Stage, 14-Day learning & revision plan for LL.B. 6th Semester Company Law (Paper 6.2).
1
Stage 1: Basics & Foundation Week 1 | Day 1–2
- Understand what MOA and AOA are and their fundamental purpose.
- Read Section 2(5) – Definition of "articles" and Section 2(56) – Definition of "memorandum".
- Learn the analogy: MOA = Company's Birth Certificate + Passport; AOA = Company's Internal Rulebook.
- Understand the legal hierarchy: Companies Act 2013 > MOA > AOA > Board Resolutions.
- Memorize Section 6 – The Act overrides MOA and AOA.
🎯 Goal: Clearly distinguish between MOA and AOA in your own words without referring to notes.
2
Stage 2: Core Provisions Week 1–2 | Day 3–6
- Study Section 4 in detail — All 6 clauses of MOA (Name, R.O., Objects, Liability, Capital, Nominee).
- Study Section 5 — Content of AOA, Model Articles, Entrenchment Provisions [Sec 5(3)].
- Study Tables A–E (for MOA) and Tables F–J (for AOA) of Schedule I.
- Understand Section 10 — Binding Effect of MOA and AOA on company and members.
- Learn Section 9 — Effect of Registration (company becomes a body corporate).
🎯 Goal: Explain each clause of MOA and key provisions of AOA with practical examples.
3
Stage 3: Procedures & Applications Week 2 | Day 7–9
- Study Section 13 – Alteration of MOA in detail:
- Name Clause – Central Government (RoC) approval.
- Registered Office – Intra-state vs Inter-state (NCLT needed for inter-state).
- Objects Clause – Special Resolution + filing with RoC.
- Study Section 14 – Alteration of AOA: Generally by Special Resolution; Public to Private needs NCLT.
- Study Section 15 – Alteration to be noted in copies; Penalty for non-compliance.
- Study Section 17 – Copies to be given to members within 7 days of request.
- Understand Doctrine of Ultra Vires – acts beyond Objects Clause are void and cannot be ratified.
🎯 Goal: Explain the full process of altering MOA and AOA step-by-step with section references.
4
Stage 4: Case Law Linkage Week 3 | Day 10–11
- Ashbury Railway Carriage & Iron Co. v. Riche (1875) — Doctrine of Ultra Vires. Acts beyond Objects Clause are void and cannot be ratified even by unanimous shareholder agreement.
- Salomon v. Salomon & Co. Ltd. (1897) — Company has separate legal personality from its members. MOA creates the corporate person.
- Royal British Bank v. Turquand (1856) — Turquand's Rule / Indoor Management Doctrine. Outsiders can assume internal AOA compliance.
- Hickman v. Kent Sheep Breeders (1915) — AOA creates a contract between company and members in their capacity as members only; not between company and outsiders.
- Foss v. Harbottle (1843) — Majority rule principle in internal company affairs.
🎯 Goal: Link at least one case to each doctrine — Ultra Vires, Indoor Management, Binding Effect.
5
Stage 5: Exam Revision Checklist Week 3 | Day 12–14
- ✅ Define MOA [Section 2(56)] and AOA [Section 2(5)] in one sentence each.
- ✅ List all 5 (or 6 for OPC) mandatory clauses of MOA with section references.
- ✅ Explain Section 10 – Binding Effect with a practical example.
- ✅ Explain Doctrine of Ultra Vires with Ashbury Railway case.
- ✅ Explain full alteration procedure of MOA (Section 13) — different clauses have different procedures.
- ✅ Explain alteration of AOA (Section 14) — Special Resolution; NCLT for Public to Private.
- ✅ Explain Turquand's Rule with example and exceptions.
- ✅ Write a comparison table between MOA and AOA from memory.
- ✅ Remember: Act (Section 6) always overrides MOA and AOA — hierarchy order.
- ✅ Section 17 — Members can demand copy within 7 days; Section 15 — date of alteration to be noted.
🎯 Goal: Answer any 10-mark or 15-mark exam question on MOA/AOA with: definition + provisions + examples + case law.
📊 Roadmap Summary Table
| Stage | Goal | Key Output — What You Can Do | Duration |
|---|---|---|---|
| Stage 1 — Basics | Understand what MOA & AOA are | Distinguish MOA vs AOA; explain legal hierarchy | 1–2 Days |
| Stage 2 — Core Provisions | Master Sections 4, 5, 9, 10 | Explain all clauses of MOA; contents of AOA with examples | 3–4 Days |
| Stage 3 — Procedures | Master Alteration Sections 13–17 | Walk through MOA/AOA alteration step-by-step; explain Ultra Vires | 3 Days |
| Stage 4 — Case Law | Link doctrines to landmark cases | Quote & apply Ashbury, Turquand, Hickman, Salomon in exam answers | 2 Days |
| Stage 5 — Exam Revision | Comprehensive revision | Answer any MOA/AOA question: definition + provisions + example + case law | 2–3 Days |