What is the Memorandum and Articles of Association when incorporating a company? from Alicia Reno's blog

When embarking on the journey of business registration in Sri Lanka, entrepreneurs must familiarise themselves with two crucial documents: the Memorandum of Association (MOA) and the Articles of Association (AOA). These documents form the foundation of a company's legal existence and govern its operations.

Memorandum of Association

The MOA is a fundamental document that outlines the company's relationship with external stakeholders. It serves as the company's constitution and defines its scope of activities. Key components of the MOA include:

·         Name Clause: Specifies the company's official name.

·         Registered Office Clause: States the location of the company's registered office.

·         Objects Clause: Describes the company's main objectives and activities.

·         Liability Clause: Defines the extent of shareholders' liability.

·         Capital Clause: Outlines the company's authorised share capital.

Articles of Association

The AOA complements the MOA by detailing the company's internal management rules and procedures. It governs the relationships between shareholders, directors, and other stakeholders. Essential elements of the AOA include:

·         Share capital and rights attached to shares.

·         Procedures for issuing and transferring shares.

·         Appointment and removal of directors.

·         Conduct of board and shareholder meetings.

·         Dividend distribution policies.

·         Winding-up procedures.

During the incorporation of a company in Sri Lanka, both the MOA and AOA must be prepared and submitted to the Registrar of Companies. Many entrepreneurs seek assistance by searching for https://www.invictus.law/practice-areas/ or professional company secretaries in Sri Lanka to ensure these documents are drafted correctly and comply with local regulations.

The MOA and AOA play a vital role in establishing a company's legal identity and operational framework. They provide transparency to stakeholders, protect shareholder interests, and guide the company's decision-making processes. As the business evolves, these documents can be amended to accommodate changes in the company's structure or objectives, subject to shareholder approval and legal requirements.

Understanding the significance of the MOA and AOA is crucial for anyone considering starting a business in Sri Lanka. These documents not only fulfil legal obligations but also serve as a roadmap for the company's future growth and success.