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MEMORANDUM OF ASSOCIATION (MOA) & ARTICLES OF ASSOCIATION (AOA) -…
MEMORANDUM OF ASSOCIATION (MOA) & ARTICLES OF ASSOCIATION (AOA)
MOA
Basic constitution and presents (structure) the company to the outside world
Construction of MoA
General rule
Nothing in the MoA must contradict the provisions of the Act, unless a contrary intention is provided by the Act itself.
Section 33(1)
A statutory contract binding between the company and its members qua members and between the members inter se.
Object Clause
Validly do in its capacity only such things as are within its objects and things reasonably incidental thereto and are not prohibited by the law.
Types of activities / businesses
Legal personality of a comp for purposes stated in the MoA.
Constructive Notice
as to MoA
A person dealing with a company is deemed to have read the registered documents and considered to have understood them.
Constructive notice –
e.g. legal advertisement in newspaper
Alteration of MoA
Name
Conversion unlimited – limited
Conversion private – public
Conversion of public – private
Object clause
Share capital
Alteration by the HC under sec. 181
Effect of Alteration
Takes effect upon lodgment of the special resolution
Not immediately upon the passing of the special resolution
Not upon the passing of the special resolution
The altered objects should only be implemented by the company on or after the effective date
Need to Lodge MoA
(Sec. 16(1))
Requirement to lodge the MoA
To Registrar
The comp acquires legal status of body corporate
Registrar issues certificate of incorporation
Members' Right to
Have Copy of MoA
Subject to a payment of RM5 or such lesser sum.
A copy of the MoA must be issued by the company after the date of alteration.
Basis Requirement
(Sec. 18(1))
Limited by guarantee
Unlimited
Limited by shares
AOA
Matters of internal administration.
The Nature of AoA
Internal regulations
Must be lawful
Cannot override and overrule
any provisions in MoA
Public documents and open for inspection
AoA Not to be Rectified by the Court
The court has no jurisdiction to rectify (correct/amend) the articles of a company.
Sec. 31: Alteration of the articles in accordance with the statutory procedure of a special resolution (A resolution that requires a large majority vote of members present, usually 2/3 or 3/4, at GM)
Contents
Office
Table A
Preliminary contracts
Classes of shares
Lien on shares
Calls on shares
Transfer of shares
Transmission of shares
Alteration of share
Reduction of share
General meetings
Directors
Account and audit
Dividends
Notices
Winding up
Companies Requiring AoA
Limited by guarantee
Limited both by shares and guarantee
Unlimited
Binding Effects of AoA
Sec. 33(1)
Not defeasible and is furthermore incapable of being rectified by the court.
The essential effect
When registered, it constitutes a statutory contract.
Binding as if signed and sealed by every members
Statutory contract
Binding between the company and the members qua members.
Binding between the members inter se.
Cases
Hickman v. Kent or Romney Marsh
Sheepbreeders' Association
Wong Kim Fatt v. Leong & Co Sdn Bhd & Anor.
Legality of Object
Forbidden by any law
Defeat any law
Fraudulent
Immoral
Opposed to public policy
Doctrine of Ultra Vires
Meaning
Beyond the power
Lack of power
Used to describe
Acts which are beyond the capacity
Acts carried out in excess or abuse of the powers of the company by its agents
Acts in violation or in excess of the AoA
Case: Ashbury Railway Carriage
and Iron Company v. Riche
Effects
English law
Any transaction which is made outside object clause will be void.
Malaysian law
Sec. 20(1)
Any transaction which is made outside object clause is still valid as long as the parties to the contract concerned.
Sec. 20(2)(a)
Member of the company have right to take action against the company to restrain the performance of ultra vires act.
Sec. 20(2)(b)
Company or member of the company can take action against the officers of the company who authorised the ultra vires transaction.
Sec. 20(3)
Member can claim for the damages.
Minister charge with the responsibility for companies may petition to wind up the company which entered into ultra vires transaction.
Other Info
1st Director
Must be named in the MoA or AoA.
1st Secretary
Must be named in the MoA or AoA.
Sec. 11(8) – Registrar may require the MoA or AoA to be amended if name of 1st Secretary is omitted.
Form of AoA
Must be printed and divided in numbered paragraph.