FOR THE ATTENTION OF HOMEOWNERS ASSOCIATIONS THAT ARE NON-PROFIT COMPANIES
MEMORANDUM OF INCORPORATION (MOI): THE 30 APRIL 2013 DEADLINE IS APPROACHING!
One of the transitional arrangements of the 2008 Companies Act (the Act) was that businesses had two years to migrate from their constitutional documents (‘Memorandum and Articles of Association’ for a company) to the new MOI. If you haven’t yet completed this exercise, there are good reasons why you should now consider your MOI without delay:
• The Act differs from the previous Companies Act and understanding these differences and the impact they may have on your Association is a time consuming exercise
• During the two year transitional period your Memorandum and Articles of Association will take precedence over the Act (subject to certain transactions such as a take-over or duties of directors) but from 1 May 2013, if parts of your Memorandum and Articles of Association conflict with the Act, these parts will be void
Check your old Memorandum and Articles of Association to see if any specific clauses were inserted. If so and if they are still relevant you may choose to include them in your MOI (provided they do not clash with the Act).
Alterable provisions come into play and there are more than forty of them in the Act. These may be curbed or removed by the Association when drafting the MOI. Typically, alterable provisions give wide powers to directors to, for example, issue shares or take on business debt.
There are other issues to take into account, so it is worth getting expert advice – there is plenty at stake.
Remember the deadline for completing your MOI is looming. As an extra incentive if you miss the deadline of 30 April 2013, you will have to pay the Companies and Intellectual Property Commission (CIPC) a fee when submitting your MOI – there is no CIPC charge until then.