Memorandum and Articles of Association of an Offshore Company
What are Memorandum and Articles of Association?
To incorporate itself officially, a company files one original of its Memorandum of Association and Articles of Association with the Registrar of Companies. These documents can be brief or very detailed, depending on the applicable corporations law, on the standards adopted by the particular company formation agent and on the particular requirements of the client. The Memorandum and Articles provide the legal “skeleton” of the company, by setting forth all the general parameters of the company.
What are in the Memorandum and Articles of Association?
Usually these documents describe the form and type of the company, state its Registered Address and Registered Agent, list the operational objects of the company or state that the operation of the company is not limited to any particular objects, determine its authorized capital, if any, and how it should be paid up and how the shares should be issued and allocated, what types of shares the company will have, and what sort of rights will be attributed to any particular type of shares, how the directors and officers will be appointed and how they can be replaced or dismissed, what are their rights, obligations and responsibilities, how the shareholder’s meetings are called and held, the acceptable quorum for such meetings and how corporate resolutions shall be adopted, which resolutions will require what type of majority to be approved, the procedures of keeping accounts, how the company can enter into liquidation, etc.
Who Signs the Memorandum and Articles of Association?
The Memorandum and Articles of an offshore company will usually be signed by a person called “Subscriber” or “Incorporator”, or by the Registered Agent of the company, or it’s affiliated entity. The Registered Agent essentially incorporates the offshore company for the client and signs the formation documents on clients’ behalf. This relieve the client and actual owner of the offshore company from the necessity to travel to the particular offshore jurisdiction in order to sign the incorporation paperwork. In fact, in British Virgin Islands signature of the incorporation documents by the actual owners would accomplish little, because new Business Company incorporations would anyway only be accepted by the Registrar through and from licensed Registered Agents.
The initial Subscriber usually subscribes for the legally acceptable minimum amount of shares in the company. After the registration of the company, the initial Subscriber may remain registered on public file and act as nominee shareholder, or the amount of shares that he holds can be transferred to a different shareholder, as required by the client.