Getting involved in the company establishment process requires a lot of documentation process that one needs to undergo. These essentials include the respective norms that are needed to be known by the company shareholders.
One such essential document that is required by the business entity while incorporating a business is the Memorandum of Association, which you might have heard a lot.
This guide outlines the framework of a Memorandum of Association (MOA) that one must know before proceeding ahead with the incorporation of an offshore company.
Clauses in the Memorandum of Association
A Memorandum of Association (MOA) includes different clauses that highlight various aspects of the company. A few of them are stated below:
● Name clause
This clause contains the name of the company that will be registered with the registrar of the specific tax-haven jurisdiction. The company shareholders have got the flexibility to choose any name for the business entity.
However, it is to be noted that if it is a Public Limited company, it should include the word “Limited,” and in case if it is privately Limited, it should contain the name “Private Limited.”
● Situation clause
The next clause is the situation clause that includes integral aspects that consist of the registered office address, the company common seal, statutory books, etc.
However, the location needs to be intimate within thirty days from the date of incorporation. In case if the site needs to be altered, it has to be informed to the company registrar of the offshore jurisdiction.
● Object clause
The third clause is the object clause that includes the main objective or the intent behind the company incorporation. It consists of the different types of business functions that the business entity will undergo.
● Liability clause
This clause specifies the liability of each member included in the Board of the company. The shares of the company get limited by shares or by guarantee, and in case if the liability stands unlimited., this clause gets excluded.
● Capital clause
The capital clause highlights the maximum amount of capital that can be raised by the business entity, and the specified capital gets divided into shares.
The business entity can maintain only capital to the extent it is mentioned in the capital clause of the MOA.
● Subscription clause
Lastly, there comes the subscription clause that includes the name and the designated address of the company’s first subscribers.
When it comes to the private company, the minimum number of shareholders required is two, and in the case of a public company, it stands as seven.
Core Objective of Registering a Memorandum of Association for an Offshore Company
The MOA is a mandatory document that highlights the core technicalities and roles that will get performed in a business entity. The core reasons for registering the same include the following:
- It outlines the core objective behind the formation of the business entity
- It describes the core details regarding the business entity that provides for:
- The type of company that is getting formed
- The company addresses
- The operational objects
- The procedure of accepting and dismissal of company directors
- The method of share allocation etc.
Note: The Memorandum of Association (MOA) of any business is signed by a single individual known as “Subscriber” or “Incorporator” who stands near the offshore service provider.
Dealing with the preparation of a memorandum of association for an offshore company formation is a vital task that needs to be cleared successfully. Even a minor legal complication might abort the offshore company setup process, and that’s why it is essential to take the correct move from the very initial stage.
If you are planning to move forward towards the incorporation of an offshore company, it is highly recommended to take the help of the legal experts who can guide you accordingly.
The legal professionals are well-versed regarding the in-and-out of the entire process and can help you to finalize the grounds at ease.
For more information on the benefits that you can derive by joining hands with experts, read our latest blog on the Core Reasons of Hiring an Offshore Business Consultant
Business Setup Worldwide has been standing as one of the top ten consultants in Dubai who has been dealing with numerous investors and owners. Aiming to provide the best business incorporation solutions, our business advisors take the initiative of delivering tailored solutions to suit the business needs.
If you want to proceed ahead with the execution of an offshore company, feel free to have a word with our business experts. Contact us today-we’d be glad to assist!