The memorandum and articles of association are two of the documents prepared and lodged with the registry when registering your Private Limited Company in Zimbabwe.
A memorandum of association records the objectives of the company, that is the business the company will be conducting, the nominal share capital, the name(s) of the founding shareholders and their shareholding and their formal agreement to become members of the Private Limited Company.
See also: Our Private Limited Company Packages.
An articles of association is a document that defines the rules and regulations on how a Private Limited Company is governed, operated and owned. The document lays out how tasks are to be accomplished in a Private Limited Company.
Overview of the memorandum of association
The memorandum of association shows the founding shareholders of the Private Limited Company; they are referred to as subscribers who have agreed to set up and join the company under the Companies and Other Businesses Act (24:36). Within the memorandum of association of a Private Limited Company, the shareholders also undertake to hold a minimum of one issued share each.
The maximum number of shares each subscriber agrees to take will vary on a case-by-case basis, depending on the total issued share capital of a company.
The memorandum is a pro-forma document and includes a statement of compliance of each founding member. It should be delivered to the Registrar of Companies, together with the adopted articles of association, as part of the application to register the company.
Overview of the articles of association
An articles of association is a legal document that serves as the constitution adopted by a Private Limited Company when it is registered at the Companies Registry.
It includes key information about how the company should be run, how decisions are made, who can own and manage the company, the rights and responsibilities of members and directors, and the types of activities and transactions in which the company can engage.
Unlike the memorandum, the articles of association do not have a prescribed format. Companies can choose to:
- Adopt Model articles from the Companies and Other Business Entities Act (24:36)
- Remove, add or alter certain provisions in the Model articles
- Create entirely unique articles to suit their needs
Contents of Company Formation’s Model Articles of Association
PART 1: INTERPRETATION AND LIMITATION OF LIABILITY
- Liability of members.
PART 2: DIRECTORS
- DIRECTORS’ POWERS AND RESPONSIBILITIES
- Directors’ general authority.
- Shareholders’ reserve power.
- Directors may delegate.
- DECISION—MAKING BY DIRECTORS
- Directors to take decisions collectively.
- Unanimous decisions.
- Calling a directors’ meeting.
- Participation in directors’ meetings.
- Quorum for directors’ meetings.
- Chairing of directors’ meetings.
- Casting vote.
- Conflicts of interest.
- Records of decisions to be kept.
- Directors’ discretion to make further ruIes.
- APPOINTMENT OF DIRECTORS
- Methods of appointing directors.
- Termination of director ‘s appointment.
- Directors’ remuneration.
- Directors’ expenses.
PART 3: SHARES AND DISTRIBUTIONS
- All shares to be fully paid up.
- Powers to issue different classes of share.
- Company not bound by less than absolute interests.
- Share certificates.
- Replacement share certificates
- Share transfers.
- Transmission of shares.
- Exercise of transmittees’ rights.
- Transmittees bound by prior notices.
- DIVIDENDS AND OTHER DISTRIBUTIONS
- Procedure for declaring dividends.
- Payment of dividends and other distributions.
- No interest on distributions.
- Unclaimed distributions.
- Non-cash distributions.
- Waiver of distributions.
- CAPITALISATION OF PROFITS
- Authority to capitalise and appropriation of capitalised sums.
PART 4: DECISION-MAKING BY SHAREHOLDERS
- ORGANISATION OF GENERAL MEETINGS
- Attendance and speaking at general meetings.
- Quorum for general meetings.
- Chairing general meetings.
- Attendance and speaking by directors and non-members.
- VOTING AT GENERAL MEETINGS
- Voting: general.
- Errors and disputes.
- Poll votes.
- Content of proxy notices.
- Delivery of proxy notices.
- Amendments to resolutions
- ADMINISTRATIVE ARRANGEMENTS
- Means of communication to be used.
- Company seals.
- No right to inspect accounts and other records.
- Provision for employees on cessation of business.
- DIRECTORS’ INDEMNITY AND INSURANCE