Contents of Company's Articles and Memorandum of Association

A company is generally defined as a separate legal entity distinct from its owners. It is an artificial being and as such different from those that set it up. This makes it distinct from sole trader or partnership. The law governing the establishment and operation of companies in Nigeria is the Companies and Allied Matters Act (CAMA) 1990. Company formation and registration in Nigeria is easy. Nigeria is indeed a viable environment for any serious business man. In setting up of a company, however, there are basic rules and regulations guiding the internal and external affairs of the company. These rules and regulations are referred to as the Articles and Memorandum of Association i.e. the constitution of the company. In Nigeria, before a company becomes operational, the owners, otherwise referred to as the promoters, are required to formally register the company with the Corporate Affairs Commission (CAC). Part of the requirements of the CAC is the submission of the Articles and Memorandum of Association of the company which will be scrutinized, duly stamped and appropriate fee paid.

Articles of Association

The Articles of Association states the arrangement between the members of a company. It regulates the rights, duties and obligations between the members and between the members and the company. It regulates the company’s internal affairs.

Contents of Articles of Association:

1. The share capital of the company with the classes of shares to be issued, and the rights attached to each class of share, the transmission of the shares on death or bankruptcy etc.

2. The name of directors, their powers and duties, rotation of directors and their removal.

3. The meetings of the company i.e. how the meeting (which can either be annual, extra-ordinary or statutory) shall be convened and the issue of notice of meeting and also rules relating to proceedings at meetings, such as who shall preside and how voting shall be carried out.

4. The seal of the company which can either be common seal or official seal.

5. How dividends are to be paid to shareholders of the company.

6. The appointment and removal of auditors.

7. Winding up provisions containing how assets are to be distributed and indemnity of members.

Memorandum of Association

Memorandum of Association is the company’s charter i.e. a fundamental document, which is a form of its constitution. It regulates the company’s eternal affairs.

Contents of Memorandum of Association:

1. The name of the company.

2. The registered office of the company.

3. The nature of the business or businesses which the company is authorised to engage in, if the company is not formed for the purpose of carrying on business, the nature of object or objects for which it is established.

4. The restriction, if any, on the powers of the company.

5. The fact that the company is a private or public company as the case may be.

6. The fact that the liability of the members of the company is limited by shares or by guarantee or is unlimited as the case may be.

7. The amount of the authorised share capital.

8. The names and addresses of subscribers to the Memorandum of Association and the number of shares subscribed.