Adoption of a new MOI

What you need to know

A company may need to make amendments to the rules which govern the way a company is run.  These rules are set out in the MOI or Memorandum of Incorporation when the company is registered.

CIPC keeps a record of each company’s MOI along with the registrations documents.  It can become important when holding Directors and Shareholders to account. 

Good to know

If you would like to write your own MOI, it will need to adhere to the Companies Act



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Frequently Asked Questions

MOI stands for the Memorandum of Incorporation and is the documents which sets out the rules of conduct for the directors and shareholders on how to govern the company. 

The main elements of the MOI set out the rights, duties and responsibilities of the directors and shareholders as how they should run the company.  It is also an effective tool to hold directors and the owners accountable . 

Yes you can, however any changes to the MOI may not be in conflict with the Companies Acts.  If, for some reason, the new rules are in conflict with the New Companies Act then the Act will always take precedence in the ruling over the MOI.

The standard MOI or CoR 15.1A for private companies has been drafted by CIPC and is referred to as the short MOI.  The benefit of using the short MOI for a new company registration is that it is compliant with Act as there are no options available for modification.  It is a simplified MOI which means that it is more cost effective.   So logically most newly registered (Pty) Ltd use the short MOI to register their companies.  

Currently the most common reason to modify the standard MOI is for Non Profit companies to include the tax exemption clause. The second most common change is to convert the old Articles of Association and Memorandum of Understanding to the new MOI. This is only applicable to private companies registered before 1 May 2011.

This is a two-step process – the first of which is the conversion of the Par Value Share into Non Par Value shares.   Once this process is complete, we continue with standard procedure to adopt the new MOI.

The primary reason is that the old Articles of Association and Memorandum of Understanding require all private companies to be audited. This is a very costly exercise which most companies would prefer to avoid. The new Act requires companies to be audited only if their Public Interest Score is more than 300 points – which is a tiny fraction of private companies.  To bring the company rules in line with the new audit requirement most companies adopt the new MOI. 

No, SARS views all NPC in the same lights as (Pty) Ltd which means all NPCs must pay tax just like private companies.  The burden is on the directors of the NPC to prove that they are a legitimate community upliftment project should be considered for tax exemption.   

This modification requirement is to include stringent rules (clauses) regarding the distribution of funds in the NPC on its dissolution.  The adoption of these clauses is a requirement of the SARS Tax Exemption Units which grants tax free status to NPCs.  They will evaluate an NPC’s application for tax exemption but it will only be granted once the MOI is registered with CIPC includes those clauses.    A further requirement for tax exemption for an NPC is that the Director’s may not be related by blood or marriage. 

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