MOA, AOA & Share Capital

The company's constitution

Two documents form a company's constitution: the Memorandum of Association (MOA) and the Articles of Association (AOA).

Memorandum of Association

The MOA defines the company's relationship with the outside world. Its clauses cover the name, registered-office state, objects (what the company may do), liability, and capital. Acts beyond the objects clause were historically 'ultra vires'; modern objects clauses are drafted broadly to allow flexibility.

Articles of Association

The AOA governs internal management — rules on shares, board meetings, voting, dividends, director appointments and transfer of shares. Companies often adopt model articles under Table F of the Companies Act, modified to taste.

Share capital concepts

Authorised capital is the maximum the company can issue; issued/paid-up capital is what is actually subscribed and paid. Companies can issue equity (ownership and voting) and preference shares (priority on dividends/repayment). Understanding these is essential before allotting shares to founders or investors.