What are memorandum and articles of association? Why MOA (Memorandum of Association)?

Memorandum of Association

Memorandum of Association required when incorporating as a limited liability company in England and Wales, or Scotland.

The Memorandum of Association of a company, often simply called the Memorandum, is the document that governs the relationship between the company and the outside world. It is one of the documents required to incorporate a company in the United Kingdom, Ireland and India.

The Memorandum of association are statutory legal documents that define how the company is regulated and what the company will do. We submit a generic memorandum and articles that are suitable for practically all companies.

A Memorandum is required of association defines state the name of the company, the type of company (such as public limited company or private company limited by shares), the address of the registered office, the objectives of the company, its authorized share capital, and the subscribers (the original shareholders of the company), a statement of the companies authorized share capital and share price. A company may alter particular parts of its Memorandum at any time by a special resolution of its shareholders, provided that the amendment complies with company law.

Memorandum of Association ?

The Memorandum of Association is designed to communicate to the public the state of affairs of the company and its purpose of being and operating. This aids various stakeholders of the company (creditors, suppliers, shareholders, etc.) to evaluate the extent of their risk and also possibilities of the company to over come them at a future date

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Articles of Association

The articles of association define how the shareholders and officers run the company. The majority of limited companies adopt a legal table commonly referred to as ‘Table A’. This Table is presented as a series of numbered paragraphs and determines such things as how resolutions are passed and the power of directors.

The Articles of Association of a company, often simply referred to as the Articles, are the regulations governing the relationships between the shareholders and directors of the company, and are a requirement for the establishment of a company under the law of the United Kingdom and many other countries. Together with the Memorandum of Association they form the constitution of a company.

Articles typically cover the issuing of shares (also called stock), the different voting and dividend rights attached to different classes of share, restrictions on the transfer of shares, the rules of board meetings and shareholder meetings, and other similar issues.

In the United Kingdom model Articles known as Table A were published as a statutory instrument in 1985. The Articles of most companies - particularly small companies - are Table A, or closely derived from it. However, a company is free to incorporate under different Articles, or to amend its Articles at any time by a special resolution of its shareholders, provided that they meet the requirements and restrictions of the Companies Acts. Such requirements tend to be more onerous for public companies than for private ones.

The Companies Act 2006, which is expected to be brought into force in October 2008, will provide for a new form of model Articles for companies incorporated in the United Kingdom. Under the new legislation, the Articles will become the single constitutional document for a UK company, and will subsume the role currently filled by the separate Memorandum of Association.