MOA (Memorandum of Association)

Memorandum of Association (MOA) & Articles of Association (AOA)

What is the Memorandum of Association (MOA)?

A Memorandum of Association (MOA) contains all the information required to form a company at the time of incorporation. This could be called the corporate charter. Memorandum of Association (MOA) is required for incorporating a business. This document describes the business goals in general. Memorandum of Association (MOA) contains six clauses:

Name Clause: Business names that are unique and legit for the business involved. Company names that are incapable of being adopted and that are too similar to those of other companies cannot be registered.

Situation Clause: A company is required to specify the name of the state in which its registered office is located at the time of incorporation.

Object Clause: A description of the company’s main and auxiliary objects.

Liability Clause: Liabilities details about the members of the company.

Capital Clause: Company’s total capital.

Subscription Clause: Subscribers’ details, their shares, and witnesses, etc.

What is Article of Association (AOA)?

Articles of Association (AOA) constitutes the second document that contains the rules and regulations made by the company for its day-to-day management and administration. The document contains rights, responsibilities, powers, and duties of the members and directors of the corporation. The articles also include information about the accounts and audits of the company. Along with Memorandum of Association (MOA) Article of Association (AOA) are required for every company to register under law. 

Articles of Association defines the company’s entities, their roles, and designations. It elaborates whether the company is a Single Member Company (SMC), Private Limited Company (Private Limited), or a Public Limited Company (PLS). Please read on further for more clarification on each business category.

Articles of Association

Single Member Company (SMC):

Single Member Company (SMC) means a private company incorporated and limited by shares with one person / director under the regulations. That one person / director has all the privileges and ability to limit the liabilities. SMC does not collaborate with others in terms of shares. SMC cannot register shares in the name of two or more individuals to hold one or more shares jointly or individually, and the number of members of a company is limited to one. 

Private Limited Company (Pvt. Ltd.):

A private limited company is a type of business entity owned by private individuals. Shareholders are limited to their share values. The number of shareholders is limited and the company shares cannot be traded publicly. In this type, company ownership is split into shares owned by shareholders. 

Public Limited Company (PLC):

Public limited company is a company managed by directors and owned by shareholders. The public can buy shares in the public limited company. As a public company, a PLC also has other obligations, including administration related to taxation and public disclosure of financial information. This is so investors have all the information they need before investing. Since public limited companies are also listed on the stock market, they are essentially required to be more open and transparent about their details than private companies.

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