difference between MOA&AOA....♥NO SPAMS .......DON'T ANSWER THNQS FOR FREE POINTS JUST GIVE ACCURATE ANS.....♥
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Explanation:
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The Memorandum of Association of company is in fact its charter; it denes its constitution and the scope
of the powers of the company with which it has been established under the Act. It is the very foundation on
which the whole edice of the company is built.
Object of registering a memorandum of association:
w It contains the object for which the company is formed and therefore identies the possible scope of its
operations beyond which its actions cannot go.
w It enables shareholders, creditors and all those who deal with company to know what its powers are
and what activities it can engage in.
A memorandum is a public document under Section 399 of the Companies Act, 2013. Consequently,
every person entering into a contract with the company is presumed to have the knowledge of the
conditions contained therein.
w The shareholders must know the purposes for which his money can be used by the company and what
risks he is taking in making the investment.
A company cannot depart from the provisions contained in the memorandum however imperative may be
the necessity for the departure. It cannot enter into a contract or engage in any trade or business, which is
beyond the power confessed on it by the memorandum. If it does so, it would be ultra vires the company
and void.
Explanation:
The articles of association of a company are its rules and regulations, which are framed to manage its
internal aairs. Just as the memorandum contains the fundamental conditions upon which the company
is allowed to be incorporated, so also the articles are the internal regulations of the company (Guiness vs.
Land Corporation of Ireland). These general functions of the articles have been aptly summed up by Lord
Cairns in Ashbury Carriage Co. vs. Riches as follows: “The articles play a part subsidiary to memorandum of
association. They accept the memorandum as the charter of incorporation, and so accepting it the articles
proceed to dene the duties, the rights and powers of the governing body as between themselves and the
company and the mode and form in which the business of the company is to be carried on, and the mode
and form in which changes in the internal regulation of the company may from time to time be made.”
The document containing the articles of association of a company (the Magna Carta) is a business document;
hence it has to be construed strictly. It regulates domestic management of a company and creates certain
rights and obligations between the members and the company [S.S. Rajkumar vs. Perfect Castings (P)
Ltd.].
The articles of association are in fact the bye-laws of the company according to which director and other
ocers are required to perform their functions as regards the management of the company, its accounts
and audit. It is important therefore that the auditor should study them and, while doing so he should note
the provisions therein in respect of relevant matters.