The Companies Act requires all companies formed in India to submit documents that declare the capital structure of the business, the business it’s into, and the way it’s run, owned and governed. These details are contained within the Memorandum of Association (MoA) and Articles of Association (AoA). consider them as your company’s constitution. The format is standard for these documents, but you would like to possess them witnessed by a lawyer. Let’s learn what exactly they’re for and the way you’ll have them altered as you grow your business:
Memorandum of Association (MoA)
Contents: the most purpose of the MoA is to verify that the shareholders wish to create a corporation under the businesses Act, 2013. Every subscriber must receive a minimum of one share and therefore the document must state the name of the corporate, the registered office address, the aims and objectives of the business, capital structure, and knowledge about the shareholders, together with their liability.
Amendment: Any alteration to those clauses has to be communicated to the Registrar of Companies (RoC).
A change within the name requires written approval of the govt. if substantial. A change within the address requires a special resolution to be passed if within the identical state; if it falls under the jurisdiction of a special RoC, then also a confirmation from the govt. (which then must be filed with the RoC within 30 days). The objects are often altered by the passing of a special resolution on the board. All other changes have to be communicated in writing to the RoC.
Articles of Association (AOA)
Contents: The AoA defines the duties and powers of the Board of Directors, individual roles and responsibilities of the administrators, and the way the business is to be carried on. Other important contents are the classes of shares, the procedure for issuing and transfer of share certificates, the voting rights of members, and their borrowing power.
Amendment Of AOA
Any changes to the AoA are often made by special resolution and must be communicated to the RoC within 30 days and registered within three months. Of course, only changes authorized by the Act will be made and these must be for the great of the corporate as an entire.
The MoA is the charter for the corporate, defining the larger picture, while the AoA defines internal regulations. Therefore, the MoA requires governmental authorization while the AoA is changed by special resolution.