Articles of Association and Memorandum of Association are essential legal documents for the incorporation of a company, but they differ in purpose and scope. The Articles of Association define the internal rules and regulations governing the management of the company, including procedures for meetings, director roles, and shareholder rights. The Memorandum of Association, however, outlines the company’s external objectives, scope, and relationship with the outside world, specifying the business activities it can undertake.

What is a Memorandum of Association?

The Memorandum of Association (MoA) is a critical document that defines the constitution and scope of a company's operations that extend outside its interactions with the external environment. It lays down the limits beyond which a company's actions cannot extend, essentially detailing the relationship between the company and the outside world. This document is mandatory for all companies and serves as the company's charter.

Examples of Memorandum of Association contents:

1. The company’s name.
2. The company’s registered office address.
3. The objectives for which the company is formed.
4. The liability of the members.
5. The share capital and division into shares of fixed amount.

What is an Articles of Association?

The Articles of Association (AoA) acts as the bylaws or rules based on which a company governs its internal operations and management. This document outlines how tasks are to be accomplished within the organization, including the process for appointing directors and handling financial records. The AoA can be tailored to meet the specific needs of the company, as long as it does not conflict with the MoA or the laws of the land.

Examples of Articles of Association contents:

1. Procedures for appointing company directors and officers.
2. Handling of financial records and the execution of corporate transactions.
3. The organization of corporate meetings.
4. Voting rights and procedures at meetings.
5. Dividend distribution policies.

Difference Between Articles of Association and Memorandum of Association:

Basis	Memorandum of Association	Articles of Association
Purpose	Defines the company’s relationship with the outside world and states the scope of its activities.	Outlines the rules for internal management of the company.
Scope	Limited to the external affairs necessary for company incorporation.	Covers all internal regulations and operations of the company.
Flexibility	Less flexible, changes require legal procedures and are often more complex due to the nature of the content.	More flexible, can be amended more easily by the shareholders to adapt to the needs of the company.
Mandatory Status	Mandatory for all registered companies.	Mandatory for limited companies, but unlimited companies may not require an AoA if they adopt standard regulations.
Legal Requirement	Must be submitted at the time of company registration.	Must be submitted at the time of registration but can be altered later.
Focus	Focuses on the relationship between the company and the external world.	Focuses on the operations and governance within the company itself.
Binding Nature	Binds the company to the outside world, outlining what the company can and cannot do.	Binds only the members of the company to each other and dictates how the company’s internal affairs are managed.
Examples	Objectives of the company, share capital, liability of members.	Procedures for corporate governance, rights of shareholders, meeting protocols.