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  #1  
Old 25-04-2006, 08:47 PM
Icarus Icarus is offline
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Default Draft Memorandum and Articles of association

I'm going to give registering my new company (single member limited company) with the CRO a go myself. Any pointers on where I can download a draft Memorandum and Articles of Association?
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  #2  
Old 26-04-2006, 09:52 AM
ivorystraws ivorystraws is offline
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Default Re: Draft Memorandum and Articles of association

Yea, just purchase some from the CRO online... only cost 2.50 and try and search for similar businesses to your own which have recently been registered.
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  #3  
Old 26-04-2006, 10:49 PM
dam099 dam099 is offline
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Default Re: Draft Memorandum and Articles of association

Where on CRO online can you purchase a Memorandum & Articles, I can’t see any samples there?

If by purchase for E2.50 you mean download ones from a similar company and change them then bear in mind

a) AFAIK what you get is scan of the document (possibly in PDF form) which will be an image of the document not containing editable text. (I suppose you could run it through OCR software but I would be wary of this as OCR is not foolproof and a typo in this document could have serious implications).
b) Even a similar company may not be set up exactly how you would need it and by copying them you could be creating problems for yourself down the line. E.g. while it is fairly common to include a broad objects clause this is not necessarily universal and even small changes in your business could cause you to be ultra vires if your objects clause is too narrow.
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Old 26-04-2006, 10:51 PM
MandaC MandaC is offline
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Default Re: Draft Memorandum and Articles of association

Most M&A are very standard. The clause that will be different and specifically apply to your specific business is Clause 2, or 2(A) in the Memorandum of Association. A good idea would be to download the M&A of a company similar to your own and make the amendments. What will differ is the objects clause(2 or 2A) and No. 3 & 4 of the Memorandum which refers to the status of the company (limited or unlimited) and the share capital. The last page of M&A always lists the original shareholders and this will not change, no matter how many times you amend your M&A.

Hope this helps.
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  #5  
Old 27-04-2006, 10:26 AM
ivorystraws ivorystraws is offline
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Default Re: Draft Memorandum and Articles of association

Well, all I know is that I've done it with absolutely no hassle at all, nearly exactly as MandaC has stated. My company is only a small company with two directors. I have downloaded many samples of my business so as to get a wide range of examples but they vary very little. In addition, I bought some templates for Memorandum and Articles of Association from a legal stationers for approximately 5 for both (at the time).
You do receive a scan of the document from the CRO but I did not run it through OCR software, I simply retyped it and rechecked it against many examples.

Any changes in a successful business down the line can be reviewed by a solicitor, if deemed necessary, but for initial startup, the above is more than adequate IMHO.
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  #6  
Old 27-04-2006, 10:40 AM
ivorystraws ivorystraws is offline
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Default Re: Draft Memorandum and Articles of association

Just in case anyone else has problems in finding M&A documents for specific companies, simply go to the CRO, do a search on a company, click on the company name that results, click on list company submissions and request whichever documents you require.

Also, for reference, go to Brian 'O Kane's website, http://www.startingabusinessinireland.com and download the eBook, "HOW TO FORM A LIMITED COMPANY".
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  #7  
Old 27-04-2006, 01:59 PM
MandaC MandaC is offline
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Default Re: Draft Memorandum and Articles of association

Any of the standard M&A which are lodged for people on incorporation are very standard. Bear in mind that on formation, the objects Clause can only have a limited number of words(I think it is 90, or it used to be 90) so you will end up lodging a revised M&A to elaborate on your objects at a later stage anyway.

Obviously anything that is downloaded from CRO, etc, should not be lodged as is, it will have to be typed and presented and I would suggest with an original M&A to have it bound and take three copies, as it will be needed to open a Bank Account for the Company along with the Company's M&A.
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  #8  
Old 27-04-2006, 02:42 PM
Icarus Icarus is offline
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Default Re: Draft Memorandum and Articles of association

Thanks for all the replies. I'm starting to think I might just get an agency to do it!
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  #9  
Old 27-04-2006, 04:06 PM
podowd podowd is offline
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Default Re: Draft Memorandum and Articles of association

like a lot of things in life you can do them yourself but if you don't know what you're doing sometimes it's more hassle than it's worth. we specialise in incorporations for contractors but would be happy to do a one-off incorporation for you at a reduced rate of 250 - you can pm me or contact me via our website
www.prima.ie
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  #10  
Old 27-04-2006, 04:10 PM
dam099 dam099 is offline
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Default Re: Draft Memorandum and Articles of association

Quote:
Originally Posted by MandaC
Any of the standard M&A which are lodged for people on incorporation are very standard. Bear in mind that on formation, the objects Clause can only have a limited number of words(I think it is 90, or it used to be 90) so you will end up lodging a revised M&A to elaborate on your objects at a later stage anyway.
I don't think thats right. Out of interest I downloaded a random M&A yesterday of a recently formed company and the objects clause contained 27 sub clauses. Some of these sub clauses in themselves exceeded 90 words and in their entirety they blew through that limit by a lot. The first clause seemed specific to the company being formed (in so much as the name of the company suggested the business it was in) and the remaining 26 seemed to be generic ones to cover most scenarios with all sub-clauses to be construed independently.
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  #11  
Old 28-04-2006, 09:38 AM
ubiquitous ubiquitous is offline
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Default Re: Draft Memorandum and Articles of association

Quote:
Originally Posted by ivorystraws
Any changes in a successful business down the line can be reviewed by a solicitor, if deemed necessary, but for initial startup, the above is more than adequate IMHO.
The problem is that difficulties in this area occur most commonly where a business is not successful and disputes arise as a result (for example between directors, or between directors and lenders or creditors). If your business is successful, you should not have to worry too much about such pitfalls - at least you will have the money to sort out the problem. What happens otherwise?

Btw, it is not possible to retrospectively change the memo & articles of a company.
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  #12  
Old 28-04-2006, 11:31 AM
ivorystraws ivorystraws is offline
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Default Re: Draft Memorandum and Articles of association

To amend the Memorandum and Articles of Association, a Special Resolution (G1) detailing the amendments to the memorandum and articles of association of a limited company and a full set of the amended Memorandum and Articles of Association must be filed with the CRO.

Filing fee for G1 is 15.00 euro and the amended Memorandum and Articles of Association is 15.00. Total cost = 35.00 euro.


The following general requirements apply:
- The amended text must be printed or typed.
- The document must contain the up-to-date text of the memorandum/articles i.e. all changes effected since incorporation of the company must be embodied in the text.
- Manuscript alterations are not acceptable.
- The correct numerical sequence of paragraphs must be maintained.
- No document will be accepted if it is illegible or would be difficult to scan or copy.
- Photocopied texts are acceptable only if the print is easily legible and is capable of being re-photocopied and scanned satisfactorily.

Legal contracts can be put in place to cater for situations where disputes arise between directors or between directors and lenders or creditors.
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  #13  
Old 28-04-2006, 01:29 PM
MandaC MandaC is offline
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Default Re: Draft Memorandum and Articles of association

Our Formation Agent has draft Memo and Arts. pre approved by CRO, hence when one of our clients take the new company, they are only allowed change the objects clause( Clause 2A) to a clause containing only ninety words. Thats where I was saying the 90 words comes in.This happens when a client needs a company NOW ( or one that has already been incorporated) and is not prepared to wait for the CRO to approve a M&A of a company with a very detailed clause 2(which would ususally happen in the case of a pub, hotel, garage, etc.

What we do in this case is take the very basic clause 2 from the formation agent, and then file an amended M&A with the G1 dated the next day.

This would not be the case when you are incorporating a company from scratch and can wait in the CRO queue for approval, and can have as detailed clauses as you like.

The other area to watch out for in drafting M&A is in the area of share rights, if there are different classes of shares, this could be where a dispute could arise between directors/shareholders, if the correct clauses are not outlined in the articles.
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  #14  
Old 28-04-2006, 01:37 PM
ubiquitous ubiquitous is offline
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Default Re: Draft Memorandum and Articles of association

Quote:
Originally Posted by ivorystraws
To amend the Memorandum and Articles of Association, a Special Resolution....
The following general requirements apply:....
This states the obvious but ignores the essential point of what I said above - it is impossible to give retrospective effect to changes in a set of memo & articles.

Quote:
Originally Posted by ivorystraws
Legal contracts can be put in place to cater for situations where disputes arise between directors or between directors and lenders or creditors.
Indeed, but how will any such contracts stand up if the memo & articles underlying the existence & activities of the company are themselves fatally flawed?
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  #15  
Old 28-04-2006, 01:56 PM
ivorystraws ivorystraws is offline
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Default Re: Draft Memorandum and Articles of association

So, for the example where painting Company A obtained a solicitor to prepare their M&A for incorporation and Joe Soap came along using his template M&A obtained from the legal stationers and used Company A's M&A as an example to incorporate his painting company, what potential fatal flaws could exist after the CRO provides Joe with his registration cert?

Is there any such documents that can be retrospectively changed if a problem does arise within a small company business?
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  #16  
Old 28-04-2006, 02:36 PM
ubiquitous ubiquitous is offline
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Default Re: Draft Memorandum and Articles of association

dam099's post above outlined two scenarios where problems of this nature can arise.
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  #17  
Old 05-05-2006, 09:07 PM
Icarus Icarus is offline
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Default Re: Draft Memorandum and Articles of association

Quote:
Originally Posted by podowd
like a lot of things in life you can do them yourself but if you don't know what you're doing sometimes it's more hassle than it's worth. we specialise in incorporations for contractors but would be happy to do a one-off incorporation for you at a reduced rate of 250 - you can pm me or contact me via our website
www.prima.ie
Thanks a million. I ended up having a commercial solicitor friend to it for me. But thanks for the offer. Someone else should take you up on it!
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  #18  
Old 09-05-2006, 09:48 AM
ivorystraws ivorystraws is offline
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Default Re: Draft Memorandum and Articles of association

So, just to be clear, typo's and a broad objects clause are typical examples of fatal flaws in M & A documents? But this would assumme that even accountants, solicitors, company formation agents should be wary of typo's and a broad objects clause and that this is not necessarily specific to a person who incorporates their own company.

Also, how do the warnings aforementioned apply to companies bought off the shelf?

Again, it's not exactly clear whether there any such similar documents that can be retrospectively changed if a problem does arise within a small company business?
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  #19  
Old 09-05-2006, 06:10 PM
dam099 dam099 is offline
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Default Re: Draft Memorandum and Articles of association

Quote:
Originally Posted by ivorystraws
So, just to be clear, typo's and a broad objects clause are typical examples of fatal flaws in M & A documents? But this would assumme that even accountants, solicitors, company formation agents should be wary of typo's and a broad objects clause and that this is not necessarily specific to a person who incorporates their own company.

Also, how do the warnings aforementioned apply to companies bought off the shelf?

Again, it's not exactly clear whether there any such similar documents that can be retrospectively changed if a problem does arise within a small company business?
Having a broad objects clause is not a fatal flaw but not having one might be because if you have a narrow objects clause its much easier to inadvertently engage in activities which are ultra vires. If you look at a Memo & Arts with a broad objects clause you will see that they cover almost anything under the sun including things extremely removed from the real purpose of the company just so that any eventuality is covered. The one random example I downloaded had one clause which seemed to be specific to the business and then on top of that another 29 catch all clauses all of which were to be construed independently. My point is a novice might randomly download and copy something with a more narrow objects clause (they do exist though the norm is probably broad ones) not knowing any better and be ultra vires from day one.

If such a company were to fail then the liquidator will not be entertaining any requests to change the Memo & Arts and the directors could be deemed to have been carrying out the ultra vires activities in their own personal capacity and be liable for any debts resulting personally.

Typos are not necessarily fatal flaws but there is always a chance they might alter the meaning of something or render something meaningless.

The Memo & Arts can be changed if it turns out that is required but that does not necessarily validate past activities and assumes that someone realises that such a change needs to be made. The danger is businesses can evolve over time from their original core business (perhaps gradually) into areas that are not covered by their objects clause.

Off the shelf companies can still be OK as long as you change the Memo & Arts before you start trading or if they have a sufficiently broad objects clause.

Much of this is hypothetical but it does happen from time to time, probably a lot less now than in the past due to the prevelance of broad objects clauses.

You seem to have educated yourself quite a bit on the process which is good. However to recommend to someone else to just modify someone elses Memo & Arts without taking the time to educate themselves as to the requirements and potential pitfalls could see them get themselves into trouble down the line. If someone wants to save the money and do it themselves thats a risk they can choose to take but they should realise that there are downsides and it might be worth paying the E250-500 to get it done right.
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  #20  
Old 10-05-2006, 10:42 AM
ivorystraws ivorystraws is offline
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Default Re: Draft Memorandum and Articles of association

Thanks for the detailed response dam099. Your points are very valid but I still have some questions.

Was the one random sample you downloaded from the CRO implemented professionally?

So essentially, in my case, when I stated that to have obtained, "a wide range of (M&A) examples" and have "rechecked it (M&A) against many examples", would this not cover the potential pitfalls you are speaking of, with respect to broad objects clauses and common typos/structural mistakes within the documents?

Can I ask that if someone was to "educate themselves as to the requirements and potential pitfalls" of the whole company formation process, without necessarily going through with this process themselves, where would you receommend that they do this? I think it's good just to have information on this whole process and that any company director should have at least a vague understanding of it.

Also, you made a valid point about businesses evolving over time into activities not necessarily covered by the objects clauses, so would you recommend businesses to have some sort of structural legal review completed at regular intervals i.e. every 3 - 5 years or so possibly? Or in such a situation where a small business were to find themselves with an object clause which did not currently cover it's activities and the company fails.... would this lead to problems, similar to the ones you previously outlined, with the liquidator?

Finally, can you expand on your second paragraph i.e. in what situations generally, would a liquidator deem that the directors of a failed company have carried out ultra vire activities and that they be personally responsible for any resulting debts? Is it possible that this may occur in the situation I outlined in the paragraph above this?
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