What Must Be Included in the Memorandum of Incorporation?

A Memorandum of Incorporation (MOI) for a South African company must contain the mandatory items set out in section 15 and Schedule 1 of the Companies Act 71 of 2008 — the company’s name, its registered office and principal business address, the type of company, the powers of the company, the rights attaching to each class of shares, the appointment and removal of directors, and the shareholder and meeting procedures (including the procedure for altering the MOI itself). Beyond those mandatory items, an MOI typically also includes optional provisions covering share-transfer restrictions, board structure, dividend policy, and dispute-resolution mechanisms. The MOI is filed with the Companies and Intellectual Property Commission (CIPC) and, once effective, is the constitutional document that binds the company, its directors, and its shareholders.

Burger Huyser Attorneys’ Commercial Law practice drafts, amends, and audits MOIs from the firm’s head office in Linden, Randburg, working with shareholders across the Gauteng region and beyond.

The Legal Framework: What the Companies Act Requires

The MOI is not drafted against a checklist of company-secretary best practice — it is drafted against a statute, and that statute is the Companies Act 71 of 2008, which repealed the previous Companies Act 61 of 1973. Section 15 of the Act requires every company to have an MOI, in the prescribed form, that must be filed with the CIPC. Section 15(2) and (3) set out the Minister’s power to make regulations prescribing mandatory and default (“alternative”) provisions; Schedule 1 of the Act contains the default prescribed provisions that apply automatically in any area the MOI does not address.

Three companion sections give the MOI its force:

• Section 19 — makes the MOI binding on the company, each director, and each shareholder as if they had each signed it.
• Section 16 — governs the filing of the MOI and any amendments to it; the CIPC assigns a registration number and a date of effectiveness.
• Section 4 — the solvency-and-liquidity test, which any distribution provision in the MOI must be read alongside.

The practical result is a two-layer document: a layer of statutory defaults that apply unless overridden, and a layer of tailored provisions where the shareholders negotiate the deal at hand.

The Mandatory Contents: What Section 15 and Schedule 1 Require

The items below are non-negotiable. An MOI that omits any of them is liable to be returned by the CIPC, and the company is not properly constituted until the omission is corrected.

Mandatory Item	What It Covers
Company name	The full registered name (and reserved name approval, if applicable). For a company limited by guarantee, the members’ liability limit must be stated.
Type of company	Non-profit company, profit company (with or without shareholders), or state-owned company.
Registered office and principal business address	Both must be given. A post office box alone is not sufficient for the business address.
Main object, scope, or powers	Drafted broadly enough to cover the business, but not so vague that the clause can be struck down.
Rights attaching to each class of shares	Voting rights, dividend rights, and rights to distribution on winding up.
Appointment, removal, and remuneration of directors	Including any rotation requirements.
Shareholder rights and meeting procedures	Ordinary and special resolutions, quorum rules, and meeting protocols.
Procedure for altering the MOI	Section 16 requires a 60% special resolution, unless the MOI itself sets a higher threshold.
Issuing, capitalisation, and buy-back of shares	The framework for share movements, where relevant.
Public-company-specific items	The audit committee, the social and ethics committee (where turnover exceeds the public-interest score), and audit-independence rules.

The firm’s Commercial Law practice drafts MOIs that treat this schedule as a floor rather than a ceiling — these items are never omitted, but they are usually supplemented by the optional provisions discussed below.

Optional but Commonly Included Provisions

Most tailored MOIs go further than the Schedule 1 defaults. The items below are where shareholders (and their advisers) negotiate the real substance of the deal.

Optional Provision	What It Is Used For
Share-transfer restrictions	Pre-emptive rights, rights of first refusal, board approval for transfers, and tag-along/drag-along rights.
Board structure	Number of directors, alternate directors, casual vacancies, board meeting frequency and quorum, and the chair’s casting or deliberative vote.
Director duties and liability	Codes of conduct, indemnity provisions, directors’ insurance, and exclusions of liability permitted under section 77.
Dividend policy	Solvency-and-liquidity test references, declaration process, and reinvestment mechanisms.
Dispute resolution	Arbitration clauses, mediation-first clauses, and the applicable law (commonly South African law).
Reserved matters	Shareholder special-resolution thresholds above the statutory 60% — typically 75% or 75%+ for changes to class rights.
Information rights	Share-register inspection, financial-statement access, and minority-shareholder protections.
Anti-dilution and preference-share provisions	Common in venture-style or private-equity-backed companies.

Altering the MOI: When and How

Section 16 of the Companies Act governs every change to an MOI after registration. The mechanics are:

1. A special resolution is passed by the shareholders — currently 60% of voting rights, unless the MOI itself sets a higher threshold.
2. A signed copy of the resolution and the altered MOI is filed with the CIPC within 10 business days after the resolution is passed.
3. The alteration takes effect on the later of the date the resolution is passed or the date set in the resolution itself.

For state-owned companies and certain non-profit changes, additional consents may be required.

Common Drafting Mistakes and Pitfalls

MOI disputes are usually traced back to drafting shortcuts. The patterns below account for most of the litigation and CIPC objections the firm sees in practice.

• Copying a template without tailoring. Pre-existing MOIs from unrelated companies carry over class rights, board structures, and shareholder restrictions that do not match the new company.
• Restating the statute unnecessarily. Schedule 1 default provisions already apply; restating them introduces contradictions.
• Vague “main object” clauses. Drafted too broadly, they invite challenges; drafted too narrowly, they create corporate-capacity problems.
• Inconsistent share-class rights. Different rights for the same class of shares are invalid and unenforceable.
• Ignoring the solvency-and-liquidity test. Any distribution provision in the MOI must be read with section 4 of the Act.
• Forgetting CIPC filing fees. The filing fee for an MOI or amendment is set by CIPC’s fee schedule and must accompany the filing.
• Missing business address. A registered office without a separate principal business address (or vice versa) is a common compliance defect.

Burger Huyser Attorneys’ Commercial Law practice treats each of these as a checklist item at the draft-and-review stage — a tailored MOI, not a template, is what keeps a company out of trouble at the CIPC counter and at the shareholders’ meeting.

MOI vs the Old Memorandum and Articles of Association

The pre-2008 regime required two documents: a “Memorandum of Association” (object, share capital, subscriber details) and “Articles of Association” (internal rules). Both ceased to exist on 1 May 2011. The single MOI now consolidates the constitutional function of both old documents.

Companies formed before 1 May 2011 retain their existing memorandum and articles, but those constitutive documents are read alongside the new Act, and any inconsistency is resolved in favour of the Act.

The Confusion with a “Constitution” or “Founding Agreement”

Some MOIs — notably for non-profit companies and close corporations — are colloquially called a “constitution,” but the statutory document filed with the CIPC remains the MOI. Three common confusions are worth clearing up:

• A separate shareholders’ agreement is a private contract between shareholders and does not replace the MOI. It complements the MOI for matters that bind only the signatories.
• An “association” or “founding agreement” drafted for a club or voluntary body is not the same as a Companies Act MOI. The relevant statute for the body in question (for example, the Non-Profit Organisations Act 71 of 1997) governs instead.
• A trust deed is a different instrument altogether, governed by the Trust Property Control Act 57 of 1988, and is not an MOI.

How an MOI Is Filed and Comes Into Effect

The filing and effective-date mechanics are set out in section 16 of the Act and the CIPC’s practice notes:

1. The incorporators or initial directors file the MOI with the CIPC together with the company registration form (CoR 14.1) and any required consent (such as reserved-name approval).
2. The CIPC assigns a registration number and a date of effectiveness — the company exists from that date.
3. The MOI becomes part of the company’s public record and is available from the CIPC on payment of the prescribed fee.

Confirmation of the current CIPC fee schedule, the CoR 14.1 / CoR 15.1 paperwork, and any CIPC practice notes on MOI amendments should be done directly with the CIPC before filing.

When an Attorney Should Be Engaged

A basic MOI for a single-shareholder profit company can be drawn from the CIPC’s standard templates. The situations below, however, are the ones that justify the cost of tailored legal drafting:

• Multi-shareholder companies with class rights, pre-emptive rights, or board structures that diverge from the Schedule 1 defaults.
• Amendments that affect shareholder class rights or require a special-resolution threshold above the statutory 60%.
• Bespoke provisions for venture-backed companies, family trusts as shareholders, or international holding structures.
• Auditing or amending an MOI after a change in shareholding, a dispute, or a planned investment.

Burger Huyser Attorneys’ Commercial Law practice, led through the Linden, Randburg head office, handles MOI drafting, amendment, and audit alongside the related shareholders’ agreements, share subscription agreements, share buy-backs under section 48, and the directors’ resolutions and meeting minutes that bring an MOI amendment into effect — so that the MOI is read against the surrounding corporate record rather than in isolation.

Frequently Asked Questions

Is an MOI the same as a constitution?

Under the Companies Act 71 of 2008 the statutory document is the Memorandum of Incorporation (MOI). Some companies, particularly non-profits and close corporations, informally call their founding document a constitution, but it is the MOI that is filed with the CIPC and binds the company. A separate private shareholders’ agreement between shareholders does not replace the MOI; it runs alongside it.

What is the minimum an MOI must contain?

The MOI must contain the company’s name, registered office and principal business address, the type of company, the powers of the company, the rights attaching to each class of shares, the appointment and removal of directors, and the shareholder and meeting procedures. These mandatory items are set out in section 15 and Schedule 1 of the Companies Act; the MOI may include additional provisions to override or supplement the default Schedule 1 rules.

Can an MOI override the Companies Act?

The MOI may make a different provision from the default Schedule 1 rules, but it cannot override the mandatory provisions of the Companies Act itself. Any provision in the MOI that is inconsistent with a mandatory provision of the Act is invalid to the extent of that inconsistency; the Act prevails.

How do you change an MOI after the company is registered?

Section 16 of the Companies Act requires a special resolution, currently 60% of voting rights, to alter the MOI, unless the MOI itself sets a higher threshold. A signed copy of the resolution and the altered MOI must be filed with the CIPC within 10 business days; the alteration takes effect on the date of the resolution or a later date set in the resolution.

Where is the MOI filed?

The MOI is filed with the Companies and Intellectual Property Commission (CIPC), the body established under the Companies Act to register companies and intellectual property rights. The filing fee is set by the CIPC’s fee schedule and must accompany the filing; the MOI is part of the company’s public record.

Do I need an attorney to draft an MOI?

A basic MOI for a single-shareholder profit company can be drawn using the CIPC’s standard templates, but anything more tailored, including multiple share classes, pre-emptive rights, board structures, transfer restrictions, or investor-style provisions, should be drafted by an attorney because drafting errors such as inconsistent class rights, missing solvency-and-liquidity cross-references, or copy-pasted clauses from unrelated templates can create invalid provisions and shareholder disputes later.

If you are setting up a company with a non-shareholder, multi-shareholder, or investor structure and need an MOI drafted beyond the CIPC standard template, Burger Huyser Attorneys’ Commercial Law practice can help. The firm handles MOI drafting, amendment, and audit out of its head office at 49 First Avenue, Linden, Randburg (011 888 0246), with the related shareholders’ agreements, share subscription agreements, and meeting minutes run through the same practice. Get in touch to discuss the share structure, the class rights, and the items beyond the Schedule 1 defaults that your situation requires.