According to the provisions of the Companies Act a memorandum of association is a constitution document of a company that takes the form of a decision on incorporation if the company is incorporated by a single person, or the form of an agreement on association if it is incorporated by several persons.
At the occasion of company incorporation, the signatures on the memorandum of association are certified in keeping with the act which regulates signature certification.
In a general partnership, limited partnership and a limited liability company, a memorandum of association regulates the manner of management of a company and other issues in keeping with the Companies Act for each individual legal form of a company.
A joint stock company has a memorandum of association and articles of association that regulate the manner of management of the company and other issues in keeping with the Companiess Act, unless a separate act provides otherwise.
A person who later joins the company is bound by the company’s memorandum of association i.e. articles of association from the day of acquiring the status of a company member in accordance with the Companies Act.
Memorandum of association and articles of association are drafted in writing and registered in accordance with the registration act.
Amendments to the Memorandum of Association and Articles of Association
The memorandum of association of a general partnership, limited partnership and limited liability company is amended by a resolution of the general partners and limited partners, i.e. general meeting, in keeping with the Companies Act.
The resolution is signed by company members who voted for it, and that resolution is certified in keeping with the act that regulates signature certification, if so provided by the memorandum of association and if such obligation is registered in keeping with the registration.
A joint stock company’s memorandum of association is not amended.
A joint stock company’s articles of association are amended by a resolution of the general meeting, i.e. another body determined by the Companies Act, in keeping with the provisions of the Companies Act.
Following any amendment to the memorandum of association i.e. articles of association, a company’s legal representative shall draft and sign the consolidated text of such documents.
Amendments of the memorandum of association and articles of association, as well as the consolidated texts of such documents, following any such amendment, are registered in accordance with the registration act.
Nullity of Memorandum of Association
A Memorandum of association is null and void if:
- It does not have the form provided under Companies Act
- The company’s business activity as stated in the memorandum of association is contrary to the imperative regulations or public order
- it does not include provisions on the company’s business name, members’ contributions, the amount of the share capital or the company’s predominant activity
- all signatories, in the moment of entering a memorandum of association, did not have legal capacity.
Except for reasons provided under paragraph 1 Article 13 of Companies Act, a memorandum of association may not be pronounced null and void on other grounds.
Nullity of a memorandum of association is established by a competent court. If reasons for nullity are not removed by the conclusion of the main hearing, the court shall establish the nullity of a memorandum of association by means of a judgment.
If a company is registered, once the judgment establishing the nullity of a memorandum of association becomes final, the court delivers it to the business entities register, for the purpose of initiating the procedure of enforced liquidation of the company, in keeping with the Companies Act.
Nullity of a memorandum of association does not have effect on the company’s legal transactions with bona fide third parties.
Limited partners, members of a limited liability company and shareholders shall pay, i.e. enter the subscribed capital, and perform other duties undertaken towards the company, to the extent necessary to fulfill the obligations of the company towards bona fide third parties.
General partners and limited partners have joint and several and unlimited liability for the company’s obligations towards bona fide third parties.
Reimbursement of Costs Related to Company Incorporation
A company may reimburse the costs related to company incorporation to its members only if so provided by the memorandum of association. The memorandum of association shall determine or assess the amount of such costs.