Q:29. Raman Raghav is a preparing documents for formation of a Joint Stock Company but he is
confused between the role of Memorandum of Association and Article of Association. You being a
commerce student do the comparative study of MoA and AoA for him to make him understand the
importance of MoA and AoA.
Answers
Answer:
Explanation:
Every organization has its own mode of working. In a company, they are jolt down in a form of MoA and AoA. It works as a constitution and provides basic guidelines for the company like what exactly the company does, details of each main authority agent such as directors, promoters, etc. MoA contains the clause that manages the external management of a company. The AoA contains the rules and regulations that manage the internal management of the company.
It is the constitution of the company. As it provides a working blueprint for a company.
Non- compliance with these memoranda, the company may sue a member.
Every act of the company should be under the scope of MoA and AoA.
The AoA defines internal relations between the company and its members.
It also defines the rights and liability of each member of the company.
Both MoA and AoA are the basic fundamental legal documents of a company. They contain the following important clauses which are crucial for the management of a company.