A company's
Memorandum and Articles of Association are like the
constitution of a country. They define the powers of
the company and how it will work – what directors
can do, how meetings are to be called and conducted,
and a variety of other matters.
The new Companies Act has broadened
the scope of this 'constitution' - now called the Memorandum
of Incorporation - and has provided that your company's
existing Memorandum and Articles of Association must
be adjusted to comply with the new Act by 30 April 2013.
During this two-year window, your new Memorandum of
Incorporation can be lodged free of charge with the
new Companies and Intellectual Property Commission.
It is important to be pro-active because,
after 30 April 2013, if there is a conflict between
your old Memorandum and Articles of Association and
the new Companies Act, then the provisions of the new
Act will automatically apply.
|
This
could result in disruption to your company as the familiar
terms of your Memorandum and Articles of Association
fall away, and are replaced by the stark provisions
of the new Act. The Companies Act gives considerable
scope to companies to alter important provisions of
the Act to suit their circumstances (called 'alterable
provisions'). This means that you have a chance to customise
the impact that many provisions of the new Companies
Act will have on your business.
Consideration also needs
to be given to existing shareholder's agreements, which
may need to be amended in the light of the new Act and
your company's Memorandum of Incorporation.
Please give us a call
if you would like us help you in drafting a new Memorandum
of Incorporation that works for you and your company. |
