Question

Question Three (3) [20 Marks]

a) The Memorandum of Incorporation (MOI) as well as the Articles of Associations (AOA) serve as
founding documents for a company; describe the purpose as well as differences between each of
these two documents.

b) Describe the process as set out in terms of the Companies Act 28 of 2004 from whence a
company is founded, the founding documents, the parties involved up until the entity is clothed
with legal personality and opens for business.

c) Which parties would actively be involved in the day to day running of a company?

Answer 1

1) a. The Memorandum of incorporation(MOI) contains the name, registered office and other details of the company. It also includes the liabilities of its members and the authorized capital of the company. The main purpose of MOI is to limit the scope of activities and power of the company.

Whereas the Articles of Association form a document that specifies the rules and regulations for a companys operation. The pain purpose of the document is to plan how tasks are to be accomplished within the organisation.

The key difference between MOI and AOA is that Memorandum of Association is a document that contains all the fundamental information required for the incorporation of the company. and Articles of Association is a document containing all the rules and regulations that governs the company.

b. The founding documents formed as in terms of the companies act 28 of 2004 is

* Memorandum of Association which defines the scope of companies activities as well as its relation with outside world.

* Aricles of association consists of rules and regulations which are framed for internal management.

* Prospectus is a invitation to the public subscribing to the share capital and debentures is issued.

c. The parties involved in running of a business are lawyers, notaries, Economies.