The new Companies Act and the Memorandum of Incorporation

Every company that existed before 1 May 2011 (called a “pre-existing company”) needs to amend its Memorandum of Articles of Association to conform to the new Companies Act.

The new Companies Act No. 71 of 2008 came into effect on 1 May 2011.
 
The Memorandum of Incorporation (the MOI), replaces the Memorandum of Articles of Association of a company.
 
It was customary to insert a clause like this in a Shareholders Agreement:
 
Notwithstanding anything to the contrary contained in the Articles of Association of the Company, the provisions of this agreement shall apply, and if there shall be any conflict between the said Articles of Association and this agreement, the provisions of this agreement shall prevail.
 
Now, in terms of the new Companies Act, the provisions of the MOI prevail and any conflicting term in the shareholders agreement must be amended to harmonise with the new Act. Shareholders have 2 years to do so and by 1 May 2013, every company that existed before 1 May 2011 (called a “pre-existing company”) needs to amend its Memorandum to conform to the new Act.
After 1 May 2013, any provision of your shareholders agreement that is inconsistent with the new Companies Act or your company’s memorandum will be void.
So, my advice is to instruct your attorney to peruse the Articles of Association of your Company and redraft it to harmonise with the new act. He or she must also take a look at your Shareholders Agreement and change it, where necessary. Do it sooner than later.