MOA and AOA Explained: The Six Clauses, Table F, and What Founders Must Change Before an Investor Round
- The MOA defines what the company is and may do (name, state, objects, liability, capital, subscribers); the AOA defines how it is run (shares, board, meetings, transfers).
- A narrow object clause is the most common reason a company must file MGT-14 and amend the MOA before it can start a new line of business or open a bank facility.
- Investors rewrite the AOA before funding to insert transfer restrictions, board rights, reserved matters and CCPS terms — plan a founder-friendly AOA from day one.
The Memorandum of Association (MOA) and Articles of Association (AOA) are the two charter documents every company files at incorporation and lives with afterwards. Most founders click through the e-MOA and e-AOA templates in SPICe+ without reading them, and discover their importance only when a bank asks for the object clause, an investor sends a 40-page amended AOA, or a Registrar rejects a filing because the articles do not permit what the board just did. This guide explains both documents in plain English, the clauses that matter, and the changes worth making early.
MOA: the constitution — six clauses
| Clause | What it states | Why it matters |
|---|---|---|
| I. Name | The approved name with “Private Limited” | Must match the name reservation exactly |
| II. Registered office | The state in which the registered office is situated | Moving to another state needs Regional Director approval (INC-23) and an MOA amendment |
| III. Objects | III(A) main objects; III(B) matters necessary for furtherance of the main objects | Acts outside the objects are ultra vires; banks, GST officers and investors read this clause |
| IV. Liability | Limited by shares (or by guarantee) | Defines what members can lose — the unpaid amount on their shares |
| V. Capital | Authorised share capital and its division into shares of a face value | Ceiling on shares the company can issue; increased by SH-7 |
| VI. Subscription | Names, addresses and shares taken by each subscriber | The first shareholders; their subscription money must be deposited before INC-20A |
Writing the object clause properly
The 2013 Act removed the old “other objects” clause, so III(A) has to describe the business accurately and III(B) should list the enabling powers — borrowing, opening bank accounts, entering contracts, acquiring property, investing surplus funds, promoting subsidiaries. Practical rules:
- Describe the business family, not just today's product. “To develop, license and provide software, platforms, applications and technology-enabled services in any field” survives a pivot; “to build a food-delivery app” does not.
- Do not stuff in regulated activities you will not do (banking, insurance, NBFC, chit funds). They trigger regulator queries at name approval and later.
- Keep III(B) broad on finance: borrowing, giving security, issuing debentures, guarantees. Lenders check that the company can create the charge they want.
- Changing objects later needs a special resolution and MGT-14 within 30 days; if the company has raised money through a prospectus there are additional conditions.
AOA: the rulebook — Table F and what to customise
The AOA governs the internal management: classes of shares and their rights, calls and forfeiture, transfer and transmission, alteration of capital, general meetings and voting, appointment and powers of directors, board meetings, dividends, accounts, indemnity and winding up. Schedule I, Table F is the model set for a company limited by shares; if you adopt e-AOA without changes, Table F is effectively your rulebook. Points worth deciding consciously:
- Transfer restriction — a private company must restrict share transfers; the standard clause gives the board power to refuse and existing members a right of first offer.
- Quorum and casting vote — the default gives the chairman a casting vote; co-founders with 50:50 holdings often prefer to remove it and add a deadlock mechanism.
- Board composition — number of directors, who nominates, retirement by rotation (private companies can opt out).
- Entrenchment under section 5(3) — specific articles can be made alterable only by a higher threshold than a special resolution; useful for founder protections, must be declared to the Registrar.
- Electronic meetings and circular resolutions — make sure the articles permit video-conference board meetings and resolutions by circulation.
Worked example: the ₹40 lakh order a narrow object clause almost lost
A company incorporated in 2024 with the object “to manufacture and sell packaged snacks” wins a ₹40,00,000 contract in 2026 to run canteen services for a corporate campus. Its bank asks for the MOA before enhancing the working-capital limit and points out that catering services are not covered. The fix costs the company three weeks: a board meeting, an EGM notice with 21 clear days (or shorter with consent), a special resolution, MGT-14 with the altered MOA (₹300 form fee plus stamp duty in some states) and the Registrar's registration. Had III(A) read “to manufacture, process, trade in and provide services relating to food, beverages, catering and hospitality”, the limit would have been enhanced the same week.
What investors change in the AOA before funding
Every institutional round comes with a Shareholders' Agreement, and the parts of it that must bind the company are written into the AOA so that they are enforceable against the company and not just between the signatories. Expect articles on:
- Compulsorily Convertible Preference Shares (CCPS): coupon, conversion ratio, anti-dilution adjustment, liquidation preference.
- Board seats and observer rights for the investor; reserved matters that need the investor director's consent (budget, new debt, ESOP expansion, related-party deals, sale of the company).
- Pre-emptive rights on new issues, right of first refusal and tag-along on founder transfers, drag-along above a threshold.
- Founder lock-in and vesting, with buy-back of unvested shares at par.
- Information rights and audit rights.
Having a clean, professionally drafted AOA at incorporation makes this negotiation faster; the KyaTax Company Registration packages draft the objects and articles with a future funding round in mind rather than the bare Table F text.
Common mistakes
- Copy-pasting a competitor's MOA including their state and capital clauses; the Registrar rejects inconsistent charters.
- Leaving out borrowing powers in III(B), which makes the first loan a Registrar filing exercise.
- Not aligning the AOA with the SHA — if the articles are silent on a reserved matter, the company is not bound even if the founders are.
- Forgetting MGT-14 after any alteration; the change is not effective until registered and late filing costs additional fees.
- Adopting Table F blindly for a two-founder company and discovering the chairman's casting vote in a dispute.
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Open Company Registration →Frequently asked questions
What is the difference between MOA and AOA?
The MOA is the company's constitution — its name, state, objects, liability, capital and first subscribers — and defines what the company may do. The AOA is the internal rulebook for shares, directors, meetings and dividends, and defines how it is run.
How do I change the object clause of my company?
Pass a special resolution at a general meeting, file MGT-14 with the altered MOA within 30 days, and the alteration takes effect on registration by the Registrar. Companies that raised money from the public have additional conditions.
What is Table F?
Table F in Schedule I of the Companies Act, 2013 is the model Articles of Association for a company limited by shares. A company that adopts the e-AOA without customisation is effectively governed by Table F.
Can the AOA override the Companies Act?
No. Articles that conflict with the Act are void to that extent. Articles can be stricter than the Act (for example higher thresholds through entrenchment) but cannot permit what the Act prohibits.
General information for FY 2026-27, not professional advice for your specific case. Rules change — verify against the latest notification or ask a KyaTax expert.
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