When registering a company in Kenya, it is a requirement that you prepare a company Memorandum and Articles of Association. These are legal documents that contain various information on the reason why the company is being formed. The documents are divided into two parts which are memorandum and Article of Association.
Memorandum of Association
This documents serves as a statement that all the people who have signed it are interested in forming a company. The document states various things such as;
All the directors of the company to be formed.
How the shares are divided among the directors.
Whether the company is public or private.
The physical address of the company being formed.
The reason why the company is being formed (Objective of forming the company).
The amount of share capital of the company that is about to be formed.
In short, this document simply declares the owner of the company and the percentage that each director owns in terms of shares. Memorandum of association also contains details why the company is being formed and where it is located.
Articles of Association
This document on the other hand explains how your newly formed company will run its business. The document contains details such as;
Transfer of Shares: – In case directors want to transfer shares, the procedure to be followed if a director wishes to transfer his/her shares to another director.
General meetings: This document also indicates the minimum number of members that is required for a company general meeting to start.
Number of Directors: The document also specifies the number of directors required to form a private company which is a minimum of two and a maximum of seven.
Adding or removing a director: The articles of association also the procedure to be followed when adding or removing a company director.
The document also covers other issues such as voting rights, the procedure to be followed when winding up the company and dispute resolution.
By following the right legal procedure, the memorandum and articles of association can be edited in case of any changes. Read more on how to register a company.