The new Companies Act of 2008 requires every South African company’s Memorandum of Incorporation (MOI) to comply with the Act. The law asked that you amend your memorandum of incorporation by 30th April 2013. Many people are worried because they did not do this in time.
Must you amend your memorandum of incorporation?
No, you do not have to amend your memorandum. It is not and was never compulsory to amend your MOI by 30 April 2013 (or any other date). The many threats of what would happen if you failed to amend you MOI by 30 April 2013 were false:
- The government will NOT arbitrarily assign an MOI to your company.
- It is highly unlikely that you will be fined R1m or 10% of turnover.
If you have not amended it, your old MOI will continue to be of full force and effect, but only to the extent that it does not conflict with the Act. If you want to amend your MOI, you can still do so, but since 1 May 2013 you need to pay a small fee to do so.
You should probably do it anyway
Even though you do not have to do it, it is often advisable to amend your memorandum of incorporation anyway. Some instances when you should amend your MOI include:
- If your current MOI requires your company to be audited. The new Companies Act may not require you to do so, but if your MOI does, then you will have to do it.
- If your current MOI requires your company to hold an AGM at the end of its financial year. The Act does not require it, but if your MOI does, then you will have to hold the meeting.
- If there are articles in your current MOI that you rely on.
- If you have a shareholders agreement.
If you think you need to amend your MOI, do so. But you do not need to rush to get it done immediately. If you are reading this, it cannot be done by 30 April 2013 anyway.
You do NOT need to amend your MOI if:
- You are the sole shareholder and director.
- Your company was registered after 1 May 2011.
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