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Memorandum and Article of Association is a crucial document that is part of the requirements to register a Limited Company in Kenya. It consists of two parts; Memorandum of Association and Article of Association.

Memorandum of Association

Now, we will be taking you through each section of the Memorandum of Association by giving you some of the breakdown on what it contains;

  • Nature of your Business – this involves the objects for which the Company is established. You can list as many of business activities that you would like the Memorandum of Association to cover about your company. For example, a construction company activities can be; road construction, building construction, real estate, construction consultancy etc.
  • Share Capital – on this section, the document will the details of the share capital that the company can issue to its directors or shareholders. In Kenya the minimum share capital for any limited company to be register will be;
    • Ksh. 100,000 divided into 1,000 shares equals to Ksh. 100 per share. What this means is that the company directors can only issue 1,000 shares among themselves when setting up the company. However, the amount of shares can be increased but this will increase the cost of stamp duty.
  • Share Allocation – this is usually the last page of the Memorandum of Association. It is where the names of the director(s) or  shareholders or members will be listed and also it will indicate the amount of shares each person will have based on the agreement between the company owners.
    • The director(s) or  shareholders or members will be required to give their fullnames (as shown on ID/Passport), postal address and occupation.
    • Original signatures will be required from each director(s) or shareholder(s) for this section. Please note that the Company Registry won’t allowed scanned signatures.

Article of Association

Articles of association contains the rules and regulation based on the Company Act that will be governing the operations of the company.
This document cover various areas, and we have listed some of the area below;

  • Transfer of Shares – the procedure of transferring of shares by director(s) or shareholders has to follow a process that is enclosed on the Article of Association. For example, any member wishing to transfer their shares will need to give a notice in writing, a price of the shares needs to be agreed upon.
  • General Meetings – you can set the minimum quorum of members that requires for a general meeting to take place.
  • Voting Rules – every director(s) or shareholder(s) are entitled to one vote for every share they hold.
  • Numbers of Directors – the number of directors shall not be less than two [2] and, shall not exceed seven [7].
  • Winding up – If you are looking to close your business, the article of association will give you directions on the process that you will need to follow within the law.
  • Arbitration – if there is any disputes or differences between directors or shareholders on company matters, then an arbitrator will be appointed to resolve the issues.

Please note that Companies can make some amendments on the Article of Association if they want. For example, you can change the number of director(s) it takes to call an official company meeting or making a decision. But in most cases, the Article of Association document is usually left untouched because it provides a general guide that can give directions on how the company operations can be conducted.

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