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Categories of Companies Summary
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This summary is a detailed summary regarding the Categories of Companies section in AUE1601.
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1.2 Incorporation and legal status of companies – Summary1.2.1 Memorandum of Incorporation (MOI) (Sec 15-16, and 20 – 22- Also refer to regulation 15)
- The founding document of a company under the Companies Act is the MOI.
- The companies Act, 2008, provides that a company’s MOI is subject to the Act and must be
consistent with the provisions of the Act. To the extent that a provision of the MOU
contravenes or is inconsistent with the Act, it is void [sec 15(1)].
- The Companies Act, 2008, recognizes that not all its provisions are suitable for all companies
and therefore, section 15 (2) permits a company’s MOI to:
(i) Include matters that are not dealt with in the Act
(ii) Alter the effect of any “alterable” provision (These are provisions that are allowed to be
altered)
(iii) Impose on the company a higher standard, greater restriction, longer period, or any
similarly more onerous requirement, than would otherwise apply to the company in
terms of an unalterable provision of the Act.
(iv) Contain any restrictive conditions applicable to the company or change to any such
conditions, in addition to the requirements for amendments of MOIs set out in Section
16.
(v) Prohibit the amendment of any particular provision of the MOI, provided that the MOI
does 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 third bullet point above.
An “alterable” provision is a provision of the Act “in which it is expressly contemplated that is
effect on a particular company may be negated, restricted, limited, qualified, extended or
otherwise altered in substance or effect by that company’s MOI (sec 1).
For example:
- Annual Financial Statements – “The annual financial statements must be audited voluntarily
if the company’s Memorandum of Incorporation, or a shareholders’ resolution, so requires
or if the Company’s board has so determined…” [Sec 30(2)(b)(ii)(aa)].
- Notice of shareholder meetings – “A company’s Memorandum of Incorporation.
- May provide for longer or shorter minimum notice periods than required by subsection
(1)”[Sec 62(2)].
- Special resolutions – “A company’s Memorandum of Incorporation may permit:
(a) A lower percentage of voting rights to approve any special resolution; or
(b) One or more lower percentage of voting rights to approve special resolutions concerning one or
more particular matters, respectively, provided that there must at all times be a margin of at
least 10 percentage points between the highest established requirements for approval of an
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