GUIDE TO THE MEMORANDUM OF INCORPORATION

Applicable sections in the Act:Section 36 of the Act: Authorisation for shares●●●●A company’s MOI must set out:■■■■■■the classes of shares and the number of shares that it isauthorised to issue (authorised share capital),may authorise a stated number of unclassified shares which aresubject to classification by the board,In respect of each class of shares, a distinguishing designation forthat class and the preferences, rights, limitations and other termsof that class,The authorization and classification of shares, the numbers ofauthorised shares of each class and the preferences, rights,limitations and other terms associated with each class of shares asset out in the MOI may be changed only by:■■■■An amendment of the MOI by special resolution of theshareholders orThe board in circumstances set out in Section 36(3) in whichcase the company must file a Notice of Amendment of its MOIwith the Commission, except to the extent that the MOI providesotherwiseThe MOI could thus clearly set out which shares have which votingrights or perhaps that a certain class of shares do not have votingrights attached.Section 37 of the Act: Preference rights, limitations and other shareterms●●All of the shares of any particular class authorised by a company havepreferences, rights, limitations and other terms that are identical tothose of other shares of the same class. This is NOT an alterableprovision – in other words the MOI of a company cannot alter this;Section 37(2) of the Act: Voting rights●●●●●●Each issued share of a company regardless of its class has associatedwith it one general voting right except to the extent provided otherwiseby:This Act orThe preferences, rights, limitations and other terms determined by orin terms of the company’s MOI in accordance with Section 36;Section 38: Issue of sharesThe board has the power to issue shares but only within the classes andto the extent that the shares have been authorised by or in terms of thecompany’s MOI in accordance with Section 36; [See also Table I onpage 46 relating to circumstances where shareholder approval is requiredfor issuing shares in certain cases];If a company issues shares that have not been authorised in termsof Section 36 or in excess of the number of authorised shares for anyparticular class, the issuance of those shares may be retrospectivelyauthorised in accordance with Section 36 within 60 business days afterthe date on which the shares were issued;(2) The authority of the Company’s Board of Directors to increaseor decrease the number of authorised shares of any class of theCompany’s shares, to reclassify any shares that have been authorised19