6. The memorandum and articles

The memorandum of association

Section 23 says the memorandum of every company must state:

Name: the name of the company.

Registered office: that the registered office will be in Sierra Leone.

Objects: the nature of the business the company is authorised to carry on, or the objects for which it is established.

Restrictions: any restriction on the company's powers.

Status: whether the company is private or public.

Liability: whether the members' liability is limited by shares, limited by guarantee, or unlimited.

Each subscriber signs the memorandum in the presence of at least one witness, who attests the signature.

The name

A limited company's name generally ends with 'Limited', unless it is exempted under section 26. Section 28 deals with prohibited and restricted names. Under section 30 a company may change its name by special resolution with the Commission's approval. The Commission can direct a change where the name is too like another company's, or has become misleading because the business has changed. A change of name does not affect the company's rights or obligations or any legal proceedings by or against it.

The articles of association

The articles regulate the internal affairs: the issue and transfer of shares, meetings, voting, the appointment and powers of directors, dividends and so on. Section 31 deals with articles, and the Act contains model articles that a company may adopt in whole or in part.

The memorandum and articles as a contract

Section 37 says that on incorporation the memorandum and articles bind the company and the members as if each member had signed and sealed them and covenanted to observe them.

Members as members: in Hickman v Kent or Romney Marsh Sheepbreeders' Association the articles required disputes to go to arbitration. A member who sued in court instead was held to the arbitration clause. The articles are a contract between the company and its members.

Outsider rights: in Eley v Positive Government Security Life Assurance the articles said Eley should be the company's solicitor for life. He could not enforce this, because it was a right given to him as solicitor, not as a member.

Altering the constitution

Under section 43 a company may alter or add to its articles by special resolution. The power must be used in good faith for the benefit of the company as a whole: Allen v Gold Reefs of West Africa. Sections 40 to 42 control changes to the memorandum, including its business or objects. Under section 44 a member is not bound by certain alterations made after he joined, such as one requiring him to take more shares or increasing his liability, unless he agrees in writing.