Company, shareholder and founding instruments · 01
Memorandum of Incorporation
The company’s constitutional document — what the Companies Act allows the founders to change, and what it does not.
The company’s constitutional document — what the Companies Act allows the founders to change, and what it does not.
The alterable provisions the company actually wants changed, rather than the CIPC standard form reproduced; share classes, authorised shares and the board’s authority over unissued shares; director appointment, rotation and removal; quorum and voting at board and shareholder level; the matters reserved to a special resolution; pre-emptive rights on issue and on transfer; and, for a non-profit company, the objects and the non-distribution provisions in Schedule 1 of the Companies Act.
Most South African companies run on a standard-form MOI nobody has read, which means the Act’s default position governs matters the founders believe they have agreed differently. And under section 15(7), any provision of a shareholders’ agreement inconsistent with the Act or the MOI is void — so where the two disagree, the shareholders’ agreement loses. They must be drafted together, in that order.
The law it sits under
What governs this instrument.
The Memorandum of Incorporation is the company’s founding constitution under the Companies Act 71 of 2008. Section 15 governs its status and the extent to which it may alter the Act’s default rules — some provisions are unalterable, some may be altered only by the MOI, and a provision of a shareholders agreement inconsistent with the MOI or the Act is void to that extent under section 15(7).
Related pages, tools and documents
Where this instrument sits in the wider set, and the engagement that produces it.
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