Any group of persons desirous of forming a company, having decided on the type of company and the object for which it is to be formed, are required to prepare the incorporation documents. These incorporation documents, which are to be filed at the office of the Corporate Affairs Commission, must contain the Memorandum and Articles of Association.
MEMORANDUM OF ASSOCIATION
Section 27(1) of the Companies and Allied Matters Act (CAMA) states that the Memorandum of any company shall state:
- The name of the company
- The registered office of the company, which shall be situated in Nigeria
- The nature of the business or businesses which the company is authorised to carry on, or if the company is not found for the purpose of carrying on business, the nature of the object(s) for which it is established.
- The restriction, if any, on the powers of the company
- whether the company is a public or private company
- Whether the liability of its members is limited by shares, guarantee of is unlimited.
Section 27 also goes on to deal with the nature of the Memorandum of Association.
ARTICLES OF ASSOCIATION
The Articles of Association contains regulations for managing the affairs of the company. They deal with matters such as the issue and transfer of shares, rights of different classes of shareholders, debentures, dividends, accounts, meetings, appointment and powers of directors, etc.
The Articles must be printed, divided into paragraphs, numbered consecutively, bear the same stamp duty, and be signed by each of the subscribers of the Memorandum in the presence of at least one witness attesting to the signature.
The Articles are subject to the memorandum and if there is any conflict between them, the memorandum prevails. Subject to this, the two documents should be read together and any ambiguity in one may be resolved by reference to the other.
EFFECT OF THE MEMORANDUM AND ARTICLES OF ASSOCIATION
The Memorandum and Articles of Association are documents which once registered, bind the company and the members to the same extent as if they had been signed and sealed by each member, and contain covenants on the part of each member to observe their provisions. Every member in his capacity as member is bound to the company by the provisions of the Articles. Also, any right given to a member in a capacity other than that of a member has no contractual effect. Another effect of the Articles is that the company is bound to each member in his capacity as member, by the provisions of the Articles.