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BER220 Theme 1 memorandum of incorporation MOI Terms in this set (15) Functions. Of MOI • The current Companies Act 71 of 2008 ('the Act') which regulates companies in South Africa, requires one document as the constitutive document of£4.90
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BER220 Theme 1 memorandum of incorporation MOI Terms in this set (15) Functions. Of MOI • The current Companies Act 71 of 2008 ('the Act') which regulates companies in South Africa, requires one document as the constitutive document of
BER220 Theme 1 memorandum of incorporation MOI
Terms in this set (15)
Functions. Of MOI • The current Companies Act 71 of 2008 ('the
Act') which regulates companies in South Africa, requires one document as the constitutive document of the company.
• This document ...
BER220 Theme 1 memorandum of incorporation MOI
Jeremiah
Terms in this set (15)
• The current Companies Act 71 of 2008 ('the
Act') which regulates companies in South Africa, requires one document as the
constitutive document of the company.
• This document is known as the Memorandum of Incorporation ('MOI')
• It is used as the incorporation (establishing) document of the company.
Functions. Of MOI
• This is the governing document in the company and it regulates relations within a
specific company and with third parties.
• However, the MOI must be consistent with the Act.
• If not, then it is void to the extent of inconsistency.
• Directors may create rules and
• Shareholders may create shareholders' agreements.
Rules of the board and shareholders
• And they should also be consistent
with the Act.
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, 8/4/24, 8:48 AM
• In the past, third parties concluding contracts with the company, were required to
know the contents of the constitutive documents due to the filing and provision of
access at the office of the company.
It has been partly abolished in the current Act.
• Some companies MOI's contain special restrictive conditions on the capacity of the
company and authority of those who are representing companies and requirements of
Doctrine of constructive notice
amendment and prohibition of the amendment of such conditions in the MOI.
• NOI and NOA should inform third parties about such provisions. Draw their attention.
• Company name must end with RF'.
• Compliance with the provision is
required when concluding contracts
The MOI and the rules of the board are
binding:
• Between the company and each shareholder.
• Between shareholders themselves
• Between the company and each directors
Legal status of the MOI and rules
• Between the company and prescribed officers
• Between the company and any member of the
board committee or an audit committee.
• MOI and rules should be consistent with the Act
otherwise they are void to the extent of their inconsistency.
• Shareholders may also agree on certain matters and such agreements will regulate
relations between them in the company.
Shareholders agreements
• Should be consistent with MOI and the Act.
• E.g. Section 44(2) of the Act provides the board with authority to authorise financial
assistance for the purchase of company's shares.
Alterable rules
• Such provisions include words such as these. Except to the extent that the MOI
provides otherwise...
• e.g. Section 76(3)(a) and (c) of the Act provides that directors of the company when
representing the company must exercise their powers and perform their functions
• in good faith and for proper purpose
Unalterable (cannot be changed in the MOI) • in the best interests of the company
• with the degree of care, skill and diligence...
• N:B Unalterable provisions can only be
changed in the MOI if the change provides a more rigorous or stricter provision.
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