The primary purpose of a memorandum of association (MOA) is to define a company’s scope and limitations. The MOA defines the company’s relationship with its members, as well as the members’ rights.
Articles of association (AOA), on the other hand, lay down the rules related to the company’s management.
According to UAE legislation, a MOA has to contain crucial details and clauses, which are as follows:
The articles contain rules for entrenchment, allowing specific provisions to be altered. The rules in an AOA can be made by:
While both types of legal documents charter for a company, a memorandum of association contains essential details regarding the company. As for the AOA, it contains the rules and regulations that are designed by the business. An MOA serves as the company’s constitution wherein the business is built. The AOA is the by-laws, helping the company function. Both types of documents require submission for registration prior to the licensing of a company.
The memorandum of association provides the description of the objects and powers of the business, while the articles of association define operational rules.
The MOA cannot and should not be altered retrospectively. The AOA can have alterations.
The MOA contains six important clauses while an AOA is drafted if needed by the company;
A memorandum of association is mandatory for all businesses.
Alternation may be done in a memorandum of association following the passing of a special resolution from an annual general meeting and after getting the approval of the government. As for an AOA, changes can be made following the passing of a special resolution from an annual general meeting.
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