Articles of Incorporation Template and Guidance (Limited Company)

Articles of Incorporation Template and Guidance
(Limited Company)

Article 1. Name of company:

__________________________________________________________________

Article 2. Business objective:

___________________________________________________________________

ISIC code: Select code, which best identifies business activity.

_____________________________

If shareholders provide any restrictions to business activities, please state here:

___________________________________________________________________

Article 3. Street address of registered company office in the Kingdom of Cambodia:

___________________________________________________________________


Mailing address of the registered company office, if different from the street address:

___________________________________________________________________

Name of the company’s registered agent:

___________________________________

Article 4. Company duration: ___________________________________________

Article 5. Authorized Capital and Shares
Company authorized share capital riel: ___________________________________
Number of shares and class authorized: ___________________________________
Par value per share: __________________________________________________

Article 6. If additional share classes are authorized provide class, number and par value. Please state the rights, privileges, restrictions and conditions attached to each class of shares. If only one class of shares is issued please state ‘not applicable’.

___________________________________________________________________

Article 7. IF any specific restrictions on the transfer of shares are stipulated by shareholders, please state. If no restrictions are stipulated please state ‘none’.

___________________________________________________________________

Article 8. If any specific restrictions on the declaration or distribution of dividends are stipulated by the shareholder, please state. If no restrictions are stipulated, please state ‘none’.

___________________________________________________________________


Article 9. The directors of the company are required to provide shareholders with financial records and auditor reports and any further information respecting the financial position of the company and results of operations.


Article 10. After approval to liquidate and dissolve by special resolution of the shareholders, the company shall send a statement of intent to dissolve to the Director of Companies.

The death or incompetence of a shareholder does not cause the dissolution of the company. The company may continue it activities between the rightful owner or heir of the deceased or incompetent shareholder and other shareholders.


Article 11. The persons whose names and addresses are listed below are nominated as directors of the company for the indicated terms:

Name of Director/Address Term
_________________________________________________________ ________
_________________________________________________________ ________
_________________________________________________________ ________


Article 12. We, the persons whose names, professions, nationalities, addresses, and passport particulars are listed below, desire to be formed into a company in pursuance of these Articles of Incorporation and we agree to take the number of shares in capital of the company indicated:

Name/Profession/Nationality/Address/ID or Passport No. and Date Shares Allotted

________________________________________________ ____________

________________________________________________ ____________

________________________________________________ ____________


By signing the Articles of Incorporation the shareholders and directors recognize their obligation to abide by the corporate governance rules provided under the Law on Commercial Enterprises. A private limited company may amend its Articles of Incorporation based on a special resolution of the shareholders. Upon incorporation, publication of company registration shall be carried out in the Royal Gazette and Ministry of Commerce Gazette.

Signatures of Shareholders: Date:
________________________________________________ ______________
________________________________________________ ______________
________________________________________________ ______________

INSTRUCTIONS

This template Articles of Incorporation is to be used for a private limited company. Additional items may be included in the Articles of Incorporation depending on the shareholders preference. This template provides the minimum contents required for a private limited company. A private limited company must meet the following requirements:

(a) The company may have 2 to 30 shareholders. However, one person may form a company called single member private limited company. The requirements of a single member private limited company are the same manner as a private limited company except the relationship of shareholder to one another.

(b) The company may not offer its shares or other securities to the public generally, but may offer them to shareholders, family members and managers.

(c) The company may have one or more restrictions on the transfer of each class of its shares.

Article 1. The name of a private limited company shall include at the end the words "Private Limited Company.” The name of a public limited company shall include at the end the words “Public Limited Company.” A company shall display its name in Khmer language and the translation of a company’s name from one language to another language is prohibited.

Article 2. See table in Annex and select most appropriate. Select code, which best represents the business activity of the company.

Article 3. Provide street address and mailing address. A company shall send to the Director of Companies, on a prescribed form, notice of a change of address of it s register office within 15 days of the change. The registered agent refers to the legally competent natural person who shall have authority to receive official papers and documents, including summonses and subpoenas from the courts, on behalf of the company.

Article 4. The duration of the company may be determined by the incorporator. The duration may be perpetual.

Article 5. The Articles of Incorporation shall state the number of shares authorized and the par value per share.

Article 6. If more than one class of shares is issued, it shall also describe the rights, privileges, restrictions and conditions of each class of shares.

Article 7. The Law on Commercial Enterprise allows unlimited transfer of shares to family members and shareholders. The Law also allows transfers of shares to other non-shareholding third parties if the existing shareholders representing a majority of voting shares approve. The Law on Commercial Enterprises stipulates that any further restrictions on the transfer of shares should be stated in the Articles of Incorporation.



Article 8. The directors of the company may declare a dividend to be paid to shareholders out of the company’s profit or surplus. Restrictions may be stipulated in the companies Articles of Incorporation. Articles 157-159 of the Law on Commercial Enterprises provide for the rules and restrictions on dividend payments.

Article 9. Based on Articles 224 – 234 of the Law on Commercial Enterprises, the directors of the company are obliged to provide shareholders with financial records, auditor reports and any further information respecting the financial position of the company and the results of its operations required by the articles of incorporation, the by-laws or any unanimous shareholder agreement.

Article 10. Articles 251-258 of the Law on Commercial Enterprises specify the requirements for shareholders and directors to propose and approve dissolution of the company as well as the requirements for preparing a statement of intent and notice to dissolve. These articles also include liquidation provisions and the requirement for a company to file Articles of Dissolution. The dissolution and liquidation provisions shall not apply to any company that has applied for bankruptcy to the court.

Article 11. Article 121 of the Law on Commercial Enterprises specifies that directors have two year terms unless noted otherwise in a company’s articles of incorporation. Article 116 states that the initial directors shall hold office from the date of incorporation until the first general meeting of the shareholders. Article 124 states that a director may be removed with or without cause by a majority of the shareholders entitled to vote for the director. Articles 116 to 142 of the Law provide for the role, responsibilities and selection of directors. The powers of directors are specified in Article 119 of the Law on Commercial Enterprises. These powers are given to directors through the Articles of Incorporation:

(1) Appoint and remove all officers and determine the specific rights for such officers;

(2) Set the salaries and other compensation of such officers;

(3) Fix the salary or other compensation for directors and submit them to shareholders for approval;

(4) Issue notes, bonds, debentures and other evidences of debt of the company and fix their absolute, relative and contingent characteristics;

(5) Propose to shareholders the amendments or annulments to the articles of incorporation;

(6) Propose to the shareholders an agreement of merger or consolidation between the company and any other person;

(7) Propose to the shareholders the sale of all or major part of the company's assets;

(8) Propose to the shareholders a dissolution or liquidation of the company;

(9) Declare dividends in accordance with accounting principles and the terms of payment of each class of shares entitled to receive dividends;

(10) Issue shares in the company to the extent authorized in the articles of incorporation and bylaws;

(11) Borrow money;

(12) Issue, reissue or sell security of the company;

(13) Give a guarantee on behalf of the company;

(14) Mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the company to secure any obligation of the company;

(15) Close account books of each financial year and propose the annual profits for submission to the shareholders and shareholders’ general meeting.

Article 12. State the name of shareholder, profession, nationality, address, passport or identification number. Provide the number of shares to be allotted to each shareholder.

By signing the Articles of Incorporation, the shareholders and directors agree to abide by the corporate governance rules provided for by the Law on Commercial Enterprises. All shareholders must sign the Articles of Incorporation. Amendment of the Articles of Incorporation requires a special resolution of shareholders requiring the holders of each class or series of shares to vote separately by class or series. By signing the Articles of Incorporation, the shareholders and directors agree to abide by the provisions of Articles 235-240 of the Law on Commercial Enterprises governing the procedure for and nature of such amendments.


Additional Requirements Provided by the Law on Commercial Enterprises

1. Each company shall file an annual declaration with the Ministry of Commerce concerning the status of the company.

2. Selection of auditor - The shareholders of a company shall appoint an auditor by ordinary resolution at the first annual general meeting of shareholders and at each succeeding annual general meeting. The auditor shall hold office until the close of the next annual general meeting. If an auditor is not appointed at a general meeting of shareholders, the incumbent auditor continues in office until a successor is appointed.

3. By filing the Articles of Incorporation, the company is obliged to abide by the rules stipulated in Articles 128-132 and Articles 205-223 of the Law on Commercial Enterprises regarding requirements for directors and shareholder meetings.

4. By filing the Articles of Incorporation, the company is obliged to prepare and maintain company records and make those records available to shareholders and creditors free of charge according to Articles 109-110 of the Law on Commercial Enterprises.

5. A company may adopt bylaws that regulate the business or affairs of the company. However, it is not necessary for a bylaw to be filed at the Ministry of Commerce in order to confer any particular rights on the company or its directors.

6. A company shall not carry out any business or exercise any rights that are restricted by its articles.

7. Subject to the articles, the by-laws and any pre-emptive right of shareholders, shares and securities may be issued at the times and to the persons as the directors may determine. The directors shall determine the price of the shares and securities to be issued. A share shall not be issued until the payment for the share is fully paid in money, in kind, or past services. The directors determine the value of the payment in kind or past services and their decision shall be final and conclusive, if there is no actual fraud involved.

8. Articles 164-198 of the Law on Commercial Enterprises govern the issuance of securities, their registration and the transfer of securities.

9. According to Article 289 of the Law on Commercial Enterprises, the articles or bylaws may provide that any dispute between the directors and shareholders shall submit to arbitration.