This is by registration under the Companies Act, those people wishing to trade through the medium of a limited liability company must first prepare and register certain documents.
a.Memorandum of Association: this is the document in which they express inter alia their desire to be formed into a company with a specific name and objects. The Memorandum of Association of a company is its primary document which sets up its constitution and objects;
b.Articles of Association; it's a document constituting the articles of association contain the rules and regulations by which its internal affairs are governed dealing with such matters as shares, share capital, company’s meetings and directors among others;
Both the Memorandum and Articles of Associations must each be signed by seven persons in the case of a public company or two persons if it is intended to form a private company. These signatures must be attested by a witness. If the company has a share capital each subscriber to the share capital must write opposite his name the number of shares he takes and he must not take less than one share.
c.Statement of Nominal Capital – It simply states that the company’s nominal capital shall be xxx amount of shillings. The fees that one pays on registration will be determined by the share capital that the company has stated. The higher the share capital, the more that the company will pay in terms of stamp duty.
d.Declaration of Compliance: this is a statutory declaration made either by the advocates engaged in the formation of the company or by the person named in the articles as the director or secretary to the effect that all the requirements of the companies Act have been complied with. Section 184 (4) of the Companies Act also requires the registration of a list of persons who have agreed to become directors and Section 182 (1) requires the written consents of the Directors.
These are the only documents which must be registered in order to secure the incorporation of the company. In practice however two other documents which would be filed within a short time of incorporation are also handed in at the same time. These are:
1.Notice of the situation of the Registered Office which under Section 108(1) of the statute should be filed within 14 days of incorporation;
2.Particulars of Directors and Secretary which under Section 201 of the statute are normally required within 14 days of the appointment of the directors and secretary.
The documents are then lodged with the registrar of companies and if they are in order then they are registered and the registrar thereupon grants a certificate of incorporation and the company is thereby formed. Section 16(2) of the Act provides that from the dates mentioned in a certificate of incorporation the subscribers to the Memorandum of Association become a body corporate by the name mentioned in the Memorandum capable of exercising all the functions of an incorporated company. It should be noted that the registered company is the most important corporation.
sharon kalunda answered the question on April 15, 2019 at 05:33
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