Chapter

• Memorandum of Incorporation (MOI)


  Sets out the rights, duties and responsibilities of shareholders, directors and stakeholders. Determines the nature of the company. Founding documents of the company.
• MOI


  • Allows for a large degree of flexibility - content can include any provisions not covered by the Act, as long as they are consistent with the Act
  • Contains unalterable, alterable, and default provisions
• S 6(1) of the Companies Act: Companies cannot "contract out" of the Companies Act ("anti-avoidance" regime to company law)
• Matters the MOI may deal with


  • Company objects and powers
  • Restrictions/limitations on powers
  • The ability to create rules
  • Powers/restrictions of directors
  • Composition of the Board of Directors
  • Election and removal of directors
  • Alternate directors
  • Committees of the Board of Directors
  • Frequency of Board meetings
  • Personal liability of directors
  • Indemnification
  • Powers/restrictions of shareholders
  • Types of shareholder resolutions
  • Shareholder rights, including voting rights
  • Disposal of shares
  • Shareholder meetings and procedures
  • Types of shares and authorised share capital
  • What happens to assets on dissolution
  • Frequency of board meetings
  • Audit requirements
  • Amendment of MOI
• Rules made by the Board of Directors


  Matters relating to the governance of the company that are not addressed in the Act or MOI. The Board may make, amend or repeal any necessary or incidental rules, as long as they are consistent with the Act and MOI. Must be published and filed with the Commission. Can have interim or permanent binding effect.
• The MOI and rules made by the Board of Directors are binding on the company, shareholders, directors, and each prescribed officer.
• Amendments to the MOI


  1. By special resolution of the Board of Directors

  2. By special resolution of shareholders holding at least 10% of the voting rights

  3. By court order

  4. In the manner contemplated in s 36(3) and (4) by the MOI
• Alterations to the MOI

  1. To correct spelling errors, punctuation, references, grammar or similar defects on the face of the document

  2. Authorised by the Board of Directors or an individual authorised by the Board

  3. Publish a notice of alteration and file the notice of alteration
• Ring-fenced companies


  Companies whose MOI contains either restrictive/procedural requirements that impede the amendment of any particular provision, or provisions restricting/prohibiting the amendment of a particular provision. Their name must be immediately followed by "(RF)".
• Translation of the MOI


  A company may file the MOI and one or more translations in any language, along with a sworn statement by the translator that the translation is true, accurate, and complete. If there is a conflict between the original and translated versions, the original prevails.
• Consolidation of the MOI


  A company may file or the Commission may require the company to file a consolidated revision of the MOI, along with a sworn statement that the consolidated revision is a true, accurate and complete representation of the company's MOI to date.
• Authenticity of versions of the MOI


  If there is a conflict between different versions of the MOI, the following rules apply: original (as altered/amended) prevails over translation, original (as altered/amended) prevails over consolidated revision (unless the consolidated revision has been ratified by a special resolution of shareholders), latest version endorsed by the Commission prevails over any other purported version.
• Shareholders agreement


  An agreement that shareholders may enter into with each other concerning any matter relating to the company. Must be consistent with the Act and the MOI, otherwise the provisions of the MOI will take preference.
• Steps to incorporate a company


  1. Profit company: 1+ persons

  2. Non-profit company: 3+ persons

  3. Complete and sign MOI (each person)

  4. File notice of incorporation (NOI) + MOI + prescribed fee
• Role of the Commission in incorporation of a company


  • May reject NOI if: incomplete/improperly completed, initial directors are fewer than prescribed minimum, or 1+ suggested director is disqualified and the remaining directors are fewer than the required minimum
  • If NOI is accepted (registered): registration number is assigned, prescribed information is entered into Companies Register, registration certificate is issued and delivered to the company - conclusive evidence that all requirements for incorporation have been complied with from the date stated in the certificate
• Pre-incorporated contracts


  Contracts entered into by a person acting on behalf of a company that does not yet exist. Before incorporation, a company cannot perform juristic acts. S 21 provides that a company will not lose a business opportunity that presents itself prior to the incorporation of that company.
• Registration of company names


  The name of a company may not generally offend persons of a particular race, ethnicity, gender or religion. The name must not offend the common law rule of "passing off" - when a business adopts a distinguishing feature of a competitor.
• If a company name is undesirable, the Commission will assign the company number as the name and require the company to file an amended notice of incorporation using a satisfactory name.</b>
• Different types of companies and their names


  • Personal liability company: 'Incorporated' or 'Inc.'
  • Private company: 'Proprietary limited' or '(Pty) Ltd'
  • Public company: 'Limited' or 'Ltd'
  • State-owned enterprise: 'SOC Ltd'
  • Non-profit company: 'NPC'
• Similar names


  The Commission can require the applicant to serve a copy of the application and name reservation on any particular person or class of persons named in the notice, on the grounds that the person or persons may have an interest in the use of the reserved name by the applicant.
• Reservation of name


  A person may reserve one or more names for use at a later time, for newly incorporated companies or as an amendment to the name of an existing company.