Once a company is registered, an MOI is prepared which will govern the company. A memorandum of incorporation is a document that sets out the rights, duties and responsibilities of shareholders, directors and others within the company. The primary purpose of the MOI is to protect the interests of shareholders in the company. The MOI can be drafted by an attorney or be in a prescribed form available from the Companies and Intellectual Property Commission (CIPC). On the incorporation of the company the MOI must be completed and filed by way of a notice of incorporation. The MOI is binding among the company, directors, shareholders and others within the company. Section 15 (1) of the Companies Act No. 71 of 2008 (“the Act”) states that the MOI must be consistent with the provisions of the Act and that the MOI is void to the extent that it is inconsistent with the Act. The MOI may address matters that are not addressed in the Act.
The CIPC forms available on the CIPC website are available for the use by companies. These forms contain the minimum requirements but do not necessarily fit the needs of all companies. A MOI can be customised for a specific company but the MOI must be consistent with the Act.
Types of MOI
Long standard MOI This MOI is issued for non-profit companies, private companies, and non-profit companies with members and without members. The standard MOI is provided by law and is integrated into the company registration process.
Short Form of the MOI This MOI is issued to private companies, non-profit companies without members. The short form or customise MOI allows shareholders to impose certain conditions or waive certain requirements such as an audit requirement.
Ways in which a MOI can be amended
By way of a court order as stated in section 16 of the Act.
By way of a special resolution as stated in section 65 (11) of the Act.
MOI may make other arrangements as to how it can be amended.
Things to note about an MOI
The MOI is the most important document governing the company.
The MOI must be consistent with the Companies Act.
The MOI will prevail in instances where it is inconsistent with the shareholders’ agreement.
The MOI will contain information on the following,
Details of incorporators of the company
Number of directors
Content of MOI