The Memorandum of Incorporation, or MOI as it’s known in legal jargon, is the foundational document of your company. Its primary function is to regulate the relationships between the shareholders of the company, the relationships between the shareholders, as a unit, and the company and the relationship between the company and the outside world.
Since May 2011, with the enactment of the new Companies Act (2008) the position changed, somewhat. The Memorandum of Incorporation, as read with the Act, became the supreme governing document for all private companies with the effect that shareholders agreements which were inconsistent with the Memorandum of Incorporation of the company were void, to the extent of their inconsistency.
When a company is registered with the Companies and Intellectual Property Commission (CIPC), it is automatically subject to a standard Memorandum of Incorporation.
Beyond the fact that a custom Memorandum of Incorporation goes a long way to decreasing the legal and commercial risks associated with a company, as the governing document of the company, it is the primary mechanism for ensuring the continued existence of the company.
The Act allows certain of its provisions to be altered. Where a company wishes to take advantage of these alterable provisions, a custom Memorandum of Incorporation is necessary. Although a public document, since the Memorandum of Incorporation is filed with the CIPC after being adopted by special resolution, the Memorandum of Incorporation is the perfect place to regulate all aspects of the company, and to the greatest extent possible, to minimise the regulatory burden on a company.