Rules Related to Memorandums of Association in Singapore
Any business entity which has been established by one or more entrepreneurs must comply with the contents which have been stated in its memorandum of association. A company’s MOA in Singapore should be able to be accessed on its official website.
When the company is being established, the owners must audibly read the MOA at least once. While doing so, they must specify the following information:
The name of the company;
The domicile of the head office of company;
The company’s business activities;
The objectives and purposes of the company;
The details of the shares of the company;
The details of the company’s general meetings of shareholders; and
The details of appointments of members of the board of directors and board of commissioners.
There are also many other rules which must be followed by a Singaporean company. These rules are usually mentioned in the company’s constitution.
The Effect of the Memorandum of Association (MOA) and Articles of Association (AOA)
The memorandum and articles of association play crucial roles as contractual documents within a company. They establish the legal framework that governs the relationship between the company and its members, as well as among the members themselves. By virtue of this, each member possesses a personal right to ensure adherence to the provisions outlined in the memorandum and articles of association.
It is worth emphasising that both the memorandum and the articles of association are considered public documents. However, in the case of companies limited by shares, the members have the option to complement these foundational documents with a shareholder agreement. This additional agreement functions as a separate private contract exclusively among the shareholders.
One of the primary advantages of a shareholder agreement is its ability to safeguard sensitive company information from public disclosure. Certain details that are deemed confidential can be included in the shareholder agreement rather than explicitly stated in the memorandum and articles of association, providing an added layer of confidentiality and privacy.
How Memorandums of Association Benefit Singaporean Companies
Memorandums of Association in Singapore provide many different benefits to companies.
1. Clarity over identity of company
For example, the MOA will include certain information about how the company name was selected. Therefore, this prevents people from becoming confused by or misled about the purpose of the company through its name.
2. Prevent shareholder dispute over shareholding
The rules regarding shareholders and their shares are also defined in the MOA. Therefore, when there is a problem related to the shareholders, the MOA can be used to solve it. In this way, no issue that occurs in the company which concerns its shares will ever remain unsolved.
3. Details appointment, liabilities and responsibilities of directors
Another benefit relates to the appointment of the directors and commissioners. The MOA defines how many directors and commissioners must be in a company, their minimum age, and their liabilities. Whenever one or more directors show negligence towards their responsibilities, then the director can be dismissed upon the request of the members of the board of directors in accordance with the company’s MOA.
Therefore, many problems can be solved if the company’s MOA is properly followed. This shows just how truly important an MOA is to any company based in Singapore.
As such, it is extremely important for companies to have a local company secretary advising them of proper regulations.