What is interesting is that there is constantly more and more awareness on the provisions of the Companies Act No. 71 of 2008 (“Act“).
The memorandum of incorporation (“MOI“) is the “new” constitutional document which regulates matters between a company and shareholders, amongst shareholders, and between directors and shareholders and it comprises of all the “tools” necessary to give a proper structure to a company and for the proper governance thereof.
We had several inquiries regarding the drafting of a MOI, and we have drafted several simple and complex MOIs notwithstanding the – 2 year window period.
In this regard, it is still advisable to deal with confidential arrangements regarding contributions in a shareholders agreement in addition to the MOI.
The MOI –must be consistent with the Act –Is void to the extent that it contravenes, or is inconsistent with the Act.
- The MOI can deal with any matter not addressed in the Act;
- Alter an alterable provision of the Act; and
- Impose on the company a higher standard, greater restriction, longer period of time or any similar more onerous requirement, than would otherwise apply to the company in terms of an unalterable provision of the Act.
The MOI of a company may contain any restrictive condition(s) applicable to the company, and any requirement for the amendment of any such condition in addition to the requirements set out in the Act.
The MOI of a company may prohibit the amendment of any particular provision of the MOI.
The MOI may not include any provision that negates, restricts, limits, qualifies, extends or otherwise alters the substance or effect of an unalterable provision of the Act, except to the extent contemplated in the Act.
18 August 2011