How to Draft a Memorandum of Association for a Company

MOA or Memorandum of Association is a company’s corporate document wherein it defines the company’s scope of powers and its constitution. In other words, this legal document is a company’s foundation upon which it is built with. In this article, we’ll look at the regulations and legislation which govern a memorandum of association. Also, we’ll help you draft a MOA by explaining its crucial contents and clauses. 

Object of the Registration of a MOA

  • A company’s memorandum of association contains objects for which a company is established. It identifies a company’s scope of operations, as well as determines boundaries which the company shouldn’t cross. 
  • A MOA contains all the details regarding the rights and powers of the company. 
  • It is a legal corporate document that’s also public as per the UAE Companies Law; therefore, any person that enters into agreements with a company will have to be knowledgeable of the company’s memorandum of agreement contents. 

Under no circumstance will a company be able to depart from provisions which are specified in the MOA. When or if it does, it will be considered as a breach of agreement. 

Memorandum of Association Contents 

With the drafting of a memorandum of association, a company should include the following clauses of MOA:

Name clause 

  • If the company is public limited, then the company’s name has to have ‘Limited’ at the end;
  • For a private limited company, its company’s name shall have ‘Private Limited’ at the end

Take note: this isn’t applicable to businesses that are to include any of the words listed below:

  • Council; 
  • Confederation; 
  • Federation;
  • Association; 
  • Forum;
  • Foundation; 
  • Chambers, etc.
Also Read: Difference Between Memorandum Of Association And Articles Of Association

Clause for Registered Office and Address 

This clause is where the emirate is stated in which the company’s registered office will be situated. The address of the business facility the business will use also has to be within this clause. 

Object Clause 

This is where the objects are specified for which the business is being established. Furthermore, if the business changes the activities that it intends to perform and the activities are not reflected with its name, it is to change the name it utilizes within six months from the start of changing the activities. A company has to comply with name changing provisions of the authority it is registered with. Also, there is a need to secure proper licenses and permits for the implementation of different business activities. It is important this is followed to avoid acquiring fines and administrative penalties. 

Liability Clause 

This is where it should specify company members’ liability and as to whether it’s limited or unlimited.

  • For companies that are limited by shares – the clause is to specific if the members’ liability is limited to unpaid amount to shares which members hold 
  • For companies that are limited by guarantee – the clause is to specific the undertaken amount by every single one of the members to contribute to:
    • The charges, costs, and expenses for adjustment of rights of contributors and of winding up; 
    • Company assets when it decides to wind up. 

 Capital Clause 

This is only valid for the businesses that have share capital. Companies are to specify the amount for authorized capital that’s divided into shares with fixed amounts. Also, it has to state names of members, as well as shares number against the names of members. 

Association Clause 

A memorandum of association has to clearly specify the subscriber’s intention in forming a business in UAE. This would be the last clause. 

Keep in mind that there are following aspects to take note of prior to the submission of the memorandum of association to authorities:

  • The MOA is to be divided into paragraphs; 
  • The MOA has to be printed; 
  • The pages are to be numbered in sequence; 
  • There has to be a number of people that sign the MOA and it should then be notarized; 
  • The particulars of witnesses and signatories to the MOA are to be added e.g. description, address, and occupation among others. 

More Tips on Memorandum of Association Drafting in UAE 

  • A company may be able to subscribe to a memorandum of association through an agent; 
  • A minor will not be able to sign a memorandum of agreement. If the minor has a guardian, he or she can subscribe to a MOA on behalf of the minor and the subscription will be deemed to be in the minor’s personal capacity;
  • Businesses may add more provisions or clauses as required or needed apart for the compulsory ones which we mentioned earlier. 

Rights of the members of the company and the company itself may also be attached as additional clause. Before you start with MOA drafting in UAE, call our experts for advice and guidance in the matter.