Limited time remaining for companies to comply with the Companies Act
In terms of the new Companies Act the memorandum and articles of association is replaced by a document known as the memorandum of incorporation or ?MOI?. The Companies Act requires every company's MOI to comply with the provisions of the Companies Act.
Should there be any inconsistencies between a company's MOI and the Act, the provisions of the MOI will be void to the extent that it is inconsistent with the Companies Act. The same is true for a company's shareholders agreements.
Companies have until 30 April 2013 to bring their constitutional documents in conformity with the Companies Act. Prior to this deadline, a company's current constitutional documents (i.e. memorandum and articles of association and shareholders agreement) will prevail, except in regard to the following matters which are already governed by the Companies Act irrespective of contrary positions in a company's constitutional documents:
- the duties, conduct and liability of directors,
- rights of shareholders to receive any notice or have access to any information,
- meetings of shareholders and directors and the adoption of resolutions,
- fundamental transactions, takeovers and offers.
The Companies Act introduces many changes save for those listed above, many of which may have an important impact on the way a company will operate or the way in which shareholders agreed to regulate their relationship with the company and one another. It is thus vital for companies to adopt a new MOI and to consider the role of its existing shareholders agreements, failing which there may be unintended consequences.
© Trade Law Chambers 2012