What is a MOI?
The term “MOI” is an abbreviation for “Memorandum of Incorporation”. It is a document that sets out the rights, duties and responsibilities of shareholders, directors and other persons involved in a company. Every company registered in South Africa needs to have an MOI.
Often directors are not even aware that their company has a MOI.
Directors should ensure that they are familiar with their specific company’s MOI since not adherence to the rules as set out in the MOI may result in directors incurring personal liabilities.
Each company’s MOI should be tailored to suit the specific business needs. Often companies are just registered with a generic MOI and directors are not even aware that this can (and should) be tailored for their specific circumstances.
Non profit and other special purpose companies should be especially aware that non-adherence to the MOI requirements can have a severe personal impact on the directors and an incorrectly drafted MOI can result in the company not obtaining/maintaining any special tax status.
Directors should work through their company MOI’s and ensure they understand the different aspects of it. Where applicable they should amend the MOI to suit their specific company requirements.
PPHC Global, through our legal partner, can assist directors in this regard.