Overriding Effect of Act, Effect of Registration & Binding Nature of MOA/AOA
# Three Foundational Sections: 6, 9 & 10
## Section 6 - Overriding Effect of the Act
Plain meaning: Whenever there is a conflict between the Companies Act, 2013 and the MOA or AOA of a company, the Act prevails.
> Any provision in MOA/AOA that is repugnant to the Act is void to that extent.
## Section 9 - Effect of Registration
Once a company is registered (i.e., the ROC issues the Certificate of Incorporation), the following consequences automatically flow:
1. The company becomes a body corporate with the name stated in the MOA.
2. It enjoys all functions of an incorporated company under corporate law.
3. It gets perpetual succession (its life is independent of its members).
4. It has the power to acquire, hold and dispose of property in its own name.
5. It can sue and be sued in its own name.
## Section 10 - Effect of MOA & AOA
Once registered, the MOA and AOA bind the company and its members as if they had been signed by each of them. They create a contract:
Between
Binding?
Company ↔ Members
Yes
Member ↔ Member (in member capacity)
Yes
Company ↔ Outsiders
No (outsiders cannot enforce MOA/AOA as such)
## Quick Recall
Sec 6 = Act > MOA/AOA
Sec 9 = Registration → Company is born as a separate legal person
Sec 10 = MOA/AOA = contract binding the company & members
Worked example
### Example 1
Example: The AOA of M Ltd provides that the company will not declare a dividend unless approved by a particular shareholder. The Act (Sec 123) requires only Board recommendation + member approval at AGM. The AOA clause is void to the extent it conflicts with the Act (Section 6 override).
### Example 2
Example: A creditor of N Ltd tries to sue based on a clause in N's AOA promising priority of repayment. The clause cannot be enforced by the creditor as he is an outsider — MOA/AOA bind only the company and its members (Sec 10).
⚠️ Common exam mistakes
Believing that outsiders can enforce rights given to them in AOA — they cannot, unless those rights become a separate contract.
Forgetting that Section 6 makes contrary provisions in MOA/AOA void automatically, not just unenforceable.
Bare-Act text Sections 6, 9 and 10 · Companies Act, 2013 · click to expand
Section 6: Save as otherwise expressly provided in this Act, the provisions of this Act shall have effect notwithstanding anything to the contrary contained in the memorandum or articles of a company. Section 9: From the date of incorporation mentioned in the certificate of incorporation, such subscribers and all other persons who may become members of the company shall be a body corporate by the name contained in the memorandum, capable of exercising all the functions of an incorporated company under this Act and having perpetual succession with power to acquire, hold and dispose of property, both movable and immovable, tangible and intangible, to contract and to sue and be sued.