A Memorandum of Association is a legal document which can be described as the “constitution” of an incorporated company in principle which defines its objectives and powers in regard to its dealing with the outside world.
Every legal entity has a set rule guiding its operation and regulations that govern the external relationship of a company with outsiders is known as Memorandum of Association.
Purpose of Memorandum of Association
This document is also known as MOA in some countries like the United States, United Kingdom, Netherlands, and France, in Nigeria, it’s referred to as Memart (memorandum and article of association) among those who are familiar with the process of a company or business registration.
It is one of the legal requirements for a company formation in Nigeria, so also in the U.K, France, Netherlands most especially in the registration of limited liability companies. Once a company is registered, the memorandum becomes a public document.
The document contains important information, they are:
- Name of the company
- Office address
- Company’s objects
- Authorised capital
- Names of the founders
- Number of shares taken by each shareholder
- Is a private or public company?
Name of the company
You are required to run a check on CAC search to be sure that the name has not been used by anyone or an entity.
The name must be unique and should be deceptive or portrays violence or must not be intended to impersonate an existing company.
Above all, section 29, sub-section (1) stipulated that:
“The name of a private company limited by shares shall end with the word, “Limited”.
The document also contains the registered office address of the company. The house number, street, local government area of location, state where the company is located must be clearly stated in the memorandum of association document. The address must be traceable.
The object clause must briefly state the objectives for establishing the company, what it aims to produce and how it aims to achieve them.
This is the amount of authorised capital and the various shares into which it is divided
A declaration that the liability of the members are limited.
Names Of The Founders
The names of the founders of the company and the number of shares taken up by them must be stated. It also contains the different categories of capital.
Status of the company that is private or public
Section 24 of CAMA 2020 states, “Any company other than a private company shall be a public company and its memorandum of association shall state that it is a public company.”