Many of our clients have approached me with great concern regarding their company’s Memorandum of Association, since, as has been widely publicised, the grace period for registration of a new MOI expired at the end of April 2013. If your company’s Memorandum and Articles have not yet been replaced by a new style MOI, I would like to clear up some misconceptions you may have:
* the grace period entitles one to lodge a new MOI free of charge with CIPC (the old CIPRO)- CIPC was in fact charging the lodging fee before 1st May 2013 even though this is in contravention of the Companies Act;
* the standard short-form and long-form MOIs are NOT suitable for use-
they contain serious errors and omissions, e.g. your private company will become a public company if you use the standard MOIs;
* while any provision of your current articles which is inconsistent with the Companies Act will be invalid from 1st May, –
this only has practical implications for your company if the inconsistent provision is in fact applied by the company before a new MOI becomes effective;
* it is taking more than 6 weeks for CIPC to register MOIs-
the position can be improved by, in the MOI, recording the date of adoption of the MOI as its effective date, rather than waiting for the date on which it is registered by CIPC;
* lodging your new MOI is not the only current issue in terms of the Companies Act, –
you are also required to convert your authorised, but not yet issued par value shares into non-par value shares. It makes sense to lodge the relevant form along with your MOI.
Our MOIs are customised and not just properly compliant with the Companies Act- they also provide shareholders with suitable protection against the shockingly inappropriate default provisions in the Companies Act. Do contact us for a quotation.