MOA-

• It is the document of a Co. which sets out its constitution, conditions of incorporation, powers of the Co., and its objects. The main purpose is to enable external parties i.e. creditors, buyers, sellers, debtors, members, etc. to know what is the permitted range of the activities of the Co. Alterations of an MOA are complex work. They can be affected only under certain exceptional circumstances as laid down in the Act in most cases need the permission of the central government. It has more legal sanction than articles. An agreement that is not permitted by the memorandum can’t be enforced by law. Acts done by the Co beyond the scope of MOA are ultra vires & void. They cannot be ratified even by a unanimous vote by all shareholders.

AOA

• It is a document comprising rules and regulations, defines rights & duties of directors and members, to control and regulate the internal operation of the company. But AOA is alterable Any alteration can be done by passing a special resolution. Provision for Entrenchment S 5(3) of CA 2013. Can be ratified in the meeting by shareholders. Acts beyond the articles can be ratified by the shareholders provided it's within the scope of the memorandum

 Articles may provide that certain provisions of the articles will not be alterable merely by passing a special resolution; they will require a more elaborate prescribed procedure to be followed. This provision shall only be made either on the formation of a company or by an amendment in the articles agreed to by all the members of the company in case of a private company & by a special resolution in case of a public company. Where articles provide for entrenchment whether made on formation or amendment the company shall give notice to the registrar. Memorandum & articles when registered bind the company & its members to the same extent as if they have been signed by the company and each member & contain covenants on the company’s & the member's part to observe all the provisions of the memorandum & of the articles. In the case of Borland trustee v. steel bros co. ltd it was held that It binds the members and makes them duty-bound to the article.

Legal effect of the memorandum of association & articles of association.

• Members bound to the company
• Company bound to the members
• Members bound to members
• Company & the outsiders (MOA) – articles bind members to co. and co. to members but non of them to outsiders, no article can constitute a contract between the company and 3^rd person as was held in the case of Browne v. La Trinidad.
• An outsider is a person who is not a member, as was held in the case of Eley v. positive govt security life insurance

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.