## MOA vs AOA

Both documents are foundational, but they serve different purposes and have a clear hierarchy.

### Comparison Table

Basis	MOA	AOA
Content	Defines the fundamental conditions for incorporation; regulates the company's relationship with outsiders.	Contains internal regulations governing the company-member relationship.
Supremacy	Cannot contradict the law. Has supremacy over the AOA.	Subordinate to both the law AND the MOA. In case of conflict, MOA prevails.
Scope	Defines the scope of activities. Any act beyond scope is ultra vires (void) and cannot be ratified.	Regulates activities within the MOA's scope. Acts beyond AOA but within MOA can be ratified by shareholders.

### Hierarchy at a Glance

Companies Act → MOA → AOA

### Why This Matters

An ultra vires the MOA act is void ab initio and cannot be ratified even by 100% shareholders — the company never had the power.
An ultra vires the AOA (but within MOA) act is merely irregular and can be ratified by passing the appropriate resolution.

Worked example

### Example 1

Example 1: ABC Ltd.'s MOA permits only manufacturing of textiles. Its directors enter into a contract for real estate trading. Can shareholders ratify? Answer: No. The act is ultra vires the MOA and is void; even unanimous shareholder approval cannot validate it.

### Example 2

Example 2: The AOA of XYZ Ltd. requires Board approval for loans above ₹10 lakh. The MD takes a ₹15 lakh loan without Board approval. Can shareholders ratify? Answer: Yes — the act is within MOA scope but breaches AOA; it can be ratified.

⚠️ Common exam mistakes

Assuming ultra vires acts can always be ratified — only ultra vires the AOA (intra vires MOA) can be ratified.
Believing AOA can override the MOA — it cannot.

Reference:

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MOA vs AOA — Key Distinctions

Worked example

⚠️ Common exam mistakes