Typically you may want to customise the MOI if the directors and shareholders are different people.
Alterable provisions within the Companies Act, 2008:
- A company has all the legal powers and capacity of an individual, except to the extent that
- A juristic person is incapable of exercising any such powers, or having any such capacity; or
- The company’s MOI provides otherwise (e.g. the MOI may state that no director may contract on behalf of the company in his/her own capacity).
- Private, non-profit and incorporated companies may elect to comply with the extended accountability requirements;
- Shares within the same class has the same rights, limitations and terms, unless the MOI provides otherwise;
- MOI may exclude the right of first refusal of current shareholders of a private company in respect of shares issued by the company;
- MOI may forbid the board to render financial assistance to parties wanting to acquire shares in the company;
- MOI may provide for longer minimum notice periods for meetings;
- Electronic notice and electronic participation in meetings are allowed unless MOI prohibits it;
- Companies may determine a higher number of minimum directors than what the Act prescribes.
Unalterable provisions are provisions of the Act which the company may not change, such as directors’ duties and responsibilities and enhanced accountability requirements for public and state owned companies. In instances where the MOI is in conflict with the Act, the Companies Act will prevail. In addition, the Act allows for companies to add provisions to address matters applicable to that company, not addressed in the Act itself, but all provisions of the MOI must be consistent with the Act. The Memorandum of Incorporation contains the following information:
- Detail of Incorporators
- Number of directors and alternate directors
- Share capital (maximum issued)
- Content of MOI
The memorandum of incorporation (MOI) determines the minimum number of directors and alternate directors, which, in the case of a private company may not be less than one director. A customised MOI will also set out the eligibility requirements for a director as well as the directors’ term of office. In the case of a standard MOI, the term of office is indefinite and there is no restriction on the number of directors.