Memorandum and Articles of Association Tanzania (guide & samples pdf)

This is an in-depth guide to the memorandum and articles of association of a company (MEMART).

Here you will learn

• meaning of Memorandum of Association
• meaning of Articles of Association
• Contents of Memorandum of Association
• Contents of Articles of Association
• Legal effects of memorandum and articles of association
• sample of memorandum and articles of association
• Memorandum and Articles of Association pdf
• Memorandum and Articles of Association word
• etc.

In Tanzania, the Memorandum and Articles of Association are governed by the Companies Act, 2002 (Act No. 12 of 2002). This Act provides the legal framework for the formation, operation, and regulation of companies in Tanzania.

Memorandum of Association

The memorandum of association is a primary document that contains fundamental conditions upon which the company is allowed to be incorporated and operate.  It is a charter of the company and defines its reason for existence.

A Memorandum of association also regulates the external affairs of the company in relation to outsiders.

The purpose of the memorandum of association is to enable shareholders and those who deal with the company to know what its permitted range of enterprise is.  It does not only show the object of the formation of a company but also the utmost possible scope of it.

The memorandum defines the area beyond which the action of the company cannot go; inside that area, the shareholders may make such regulations for their own governance as they think fit.

The importance of the memorandum of a company can be gauged by the fact that it contains rules regarding the capital structure of the company, the liability of its members, and the scope of activities.

Contents of Memorandum of Association

The memorandum of association contains six clauses. Clause one is the company name clause, clause two is the registered office of the company clause, clause three is the objects of the company clause, clause four is the Liability Clause, clause five is the capital clause, and clause six is the Association Clause.

Clause I: The Name of the Company

The name of the company establishes the identity and is a symbol of the company.  The promoters have to choose the name with which the company is to be registered.  They should avoid undesirable names, names that are misleading or too similar.

No company is to be registered with a name that is similar to the existing company.  This is due to the fact that the name of a company is part of its business reputation.

Clause II:    Registered Office of the company

Every company shall have a registered office from the day on which it begins to carry.

Clause III:   The objects of the company

The objects clause defines the sphere of the company’s activities, the aims that its formation seeks to achieve, and the kind of activities or business that it proposes to undertake.

Clause IV:   Liability Clause

This clause shows whether the liability of the company is limited or unlimited. If it is limited is it by shares or by guarantee?

Clause V:    The capital clause

The capital clause of a company states the amount of capital with which it is registered, divided into shares of a fixed amount.  The amount of such capital is determined by the cost of starting the business and there is no statutory limitation regarding minimum or maximum.  The capital is called authorized, nominal or registered capital.

Clause VI:   Association Clause

In a memorandum of association, the association clause is also known as the subscriber/subscription clause.

In the association clause, the subscribers declare that they desire to be formed into a company and agree to take the shares stated against their names.

Articles of Association

The articles of association are the rules and regulations of a company formed for the purpose of internal management.

The articles of association of the company regulate the manner in which the company’s affairs will be managed.

While the memorandum lays down the objects and purposes for which the company is formed, the articles lay down rules and regulations for the attainment of these objects.

Contents of Articles of Association

The following are the clauses contained in the Articles of Association

1. Share capital, rights of shareholders, the variation of these rights, payment of commissions, Share certificates
2. Lien on shares
3. Calls on shares
4. Transfer and transmission of shares
5. Forfeiture of shares
6. Conversion of shares into stock
7. Alteration of capital
8. General meeting and proceedings thereat
9. Voting rights of members; voting & poll; proxies
10. Directors, their appointment, remuneration; qualification; powers, and proceedings of the Board of Directors.
11. Manager
12. Dividends & reserves
13. Accounts, Audit, and borrowing powers.
14. Winding up.

Legal effects of memorandum and articles of association

The memorandum and articles of association, when registered, bind the company and the members thereof

On registration, the memorandum and articles of association of a company become public documents.  These documents are available for public inspection in the Registrar’s office on payment of such fees as may be prescribed.

Sample of Memorandum and Articles of Association

The following is the sample of the Memorandum and Articles of Association of a Private Company Limited by Shares