Formation of a company.

The National Companies and Securities Commission (NCSC) has been established under the new national companies code to assume responsibility for the entire area of policy and administration with respect to company law. As far as possible these administrative responsibilities are delegated to various Territory Corporate Affairs Commissions.

Companies limited by shares must file with the Corporate Affairs Commission in one of these jurisdictions, the necessary documents, including the memorandum of association, setting out:

1. The name of the company.

2. The objects of the company.

3. A statement to the effect that liability of members is limited.

4. The registered, authorized or nominal capital of the company, that is the maximum amount of capital that company is permitted to raise by the issue of shares, and the division thereof into shares of a fixed amount.

At least five persons, or, in the case of a proprietary company, at least two persons, must sign the memorandum as subscribers. Each subscriber undertakes to take up a number of shares (not less than one) in the company.

A company my also lodge articles of association with the Corporate Affairs Commission. Most companies do lodge their own articles, but if they do not do so, a set of model articles embodied in one of the schedules to the national Companies Act will apply. The articles set out regulations for the operation of the company, including share transactions, meetings and powers of directors.

Memorandum and articles are public documents and persons dealing with the company are therefore deemed to have a knowledge of their contents.

Subject to certain formalities, the Corporate Affairs Commission will issue a Certificate of Incorporation. A proprietary company may then commence business, but a public company first requires a certificate entitling it to commence business.

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