Quick Answer
The Memorandum of Association (MOA) defines what a company is legally permitted to do, while the Articles of Association (AOA) define how it governs itself internally. MOA and AOA drafting cost in India is typically bundled into the incorporation professional fee for standard structures, but custom drafting for complex governance (multiple share classes, investor rights, exit clauses) costs extra and scales with complexity.
Founders incorporating a company often treat the MOA and AOA as a single formality. They aren’t. The MOA sets the boundaries of what your company can legally do, its objects, its liability structure, and its capital. The AOA sets the internal rules for running it, covering governance, share transfers, and director powers. Getting this distinction wrong at incorporation creates problems later, particularly when you need to amend governance terms or bring in investors.
What Must the Memorandum of Association (MOA) Include?
The MOA is the company’s charter document. It defines the outer limits of what the company can legally do, and anything outside its scope requires a formal amendment.
Under the Companies Act, 2013, every MOA must contain:
- Objects clause. States the business activities the company is formed to carry out. Activities outside this clause are ultra vires and legally unenforceable.
- Liability clause. Confirms whether shareholder liability is limited by shares or by guarantee.
- Capital clause. States the authorized share capital and how it is divided into shares.
- Company name and registered office state. Identifies the company and confirms the state in which its registered office is located, which determines jurisdiction for regulatory filings.
Memorandum of association drafting in India follows a prescribed format under Table A to Table E of Schedule I to the Companies Act, 2013, depending on the type of company being incorporated.
What Must the Articles of Association (AOA) Include?
If the MOA sets the boundaries, the AOA sets the rules within them. It governs how the company actually runs day to day.
A properly drafted AOA covers:
- Governance structure. Board composition, meeting procedures, and voting mechanics.
- Share transfer restrictions. Conditions under which shareholders can transfer or sell shares, including rights of first refusal.
- Director appointment, removal, and powers. How directors are appointed, removed, and what authority they hold without shareholder approval.
- Dividend and reserve provisions. How profits are distributed and how much must be retained as reserves.
- Rights attached to different share classes. Voting rights, dividend preferences, and liquidation preferences for each class of shares issued.
For companies with multiple investors or share classes, articles of association in India need to spell out these rights precisely. A generic template rarely covers preference share terms or investor veto rights adequately. For a broader view of what incorporation involves beyond these two documents, see our company incorporation guide.
Is the Standard Table F Template Enough, or Do You Need Custom-Drafted AOA?
Table F, found in Schedule I of the Companies Act, 2013, is the default AOA template for companies limited by shares. It works for straightforward structures: a small group of founders, equal shareholding, no external investors, and no complex exit terms.
Custom drafting becomes necessary once any of the following apply:
- The company has multiple share classes with different rights.
- Investors require specific board representation, veto rights, or anti-dilution protection.
- Founders want customized share transfer or drag-along/tag-along provisions.
- The company plans to raise funding within the next 12 to 18 months.
A company with two founders and no external capital rarely needs anything beyond Table F. A company preparing for a seed round almost always does. Getting the AOA right at incorporation avoids a second round of drafting and shareholder approvals later. For more detail on how MOA and AOA format in India fits into the wider registration process, see our incorporation process timelines.
Not sure which category your company falls into? Altacit Global can assess this during incorporation planning, contact info@altacit.com.
How Much Does MOA and AOA Drafting Cost in India?
For standard incorporations using Table F and a straightforward objects clause, MOA and AOA drafting cost is typically absorbed into the overall incorporation professional fee. There’s no separate line item because the drafting work is minimal.
Custom drafting changes this. Costs scale with:
- The number of share classes and associated rights.
- The complexity of governance terms (board veto rights, reserved matters, investor consents).
- Whether the AOA needs to align with a shareholders’ agreement or term sheet.
Altacit Global quotes custom MOA and AOA drafting separately from standard incorporation once these complexities are identified upfront, so founders know the exact scope before drafting begins. For a fuller cost breakdown of the incorporation process itself, see our incorporation cost guide.
Get the Governance Terms Right Before You Incorporate
The cost of fixing an AOA after investors are already on board is almost always higher than the cost of custom drafting it correctly at incorporation. If your company has any plans for outside capital, multiple share classes, or specific exit terms, treat the AOA as a governance document, not a formality.
Altacit Global drafts MOA and AOA as part of the incorporation service, with custom drafting available for companies with complex governance needs. We operate from offices in Chennai, Bangalore, Hyderabad, Kochi, and Coimbatore. Contact info@altacit.com for a scope and cost assessment before you incorporate.
Frequently Asked Questions: MOA AOA Drafting Cost India
Q1: What is the difference between MOA and AOA?
The MOA defines what a company can legally do, covering its objects, liability, and capital. The AOA defines how the company governs itself internally, covering board powers, share transfers, and shareholder rights. The MOA sets external boundaries; the AOA sets internal rules.
Q2: Can I use the standard template AOA instead of a custom one?
Yes, if your company has a simple ownership structure with no external investors, no multiple share classes, and no planned fundraising in the near term. Table F, the standard template under Schedule I of the Companies Act, 2013, covers these cases adequately.
Q3: Can the MOA and AOA be changed after incorporation?
Yes. The MOA can be amended by special resolution, though changes to the objects clause require additional RoC filings. The AOA can be amended by special resolution alone. Both amendments involve shareholder approval and are more time-consuming than getting the drafting right at incorporation.
