The duties of subscribers in a business primarily pertain to their role in the incorporation process of a company. When incorporating a company, individuals who wish to become members or shareholders of the company are known as subscribers.
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Subscription to Memorandum of Association (MOA):
Subscribers are required to subscribe to the MOA of the company. The MOA contains the fundamental conditions upon which the company is incorporated. Each subscriber must sign the MOA indicating their consent to form the company and become its members.
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Subscription to Articles of Association (AOA):
Similarly, subscribers must subscribe to the AOA of the company. The AOA outlines the internal rules and regulations governing the management and operations of the company. Like the MOA, each subscriber must sign the AOA to signify their agreement to abide by its provisions.
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Payment of Share Capital:
Subscribers must pay for the shares they subscribe to as per the terms outlined in the MOA and AOA. The payment is typically made in cash, although it can also be made in kind. Failure to pay for subscribed shares can result in legal consequences.
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Verification of Documents:
Subscribers are often required to verify the accuracy of the documents submitted for the incorporation of the company, including the MOA, AOA, and other necessary documents. This ensures that the information provided is true and correct to the best of their knowledge.
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Compliance with Legal Requirements:
Subscribers must ensure that all legal requirements for the incorporation of the company are met. This includes fulfilling procedural formalities, submitting required documents to the Registrar of Companies (RoC), and obtaining necessary approvals.
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Fiduciary Duties as Shareholders:
Once the company is incorporated, subscribers become shareholders and have fiduciary duties towards the company and its stakeholders. This includes acting in the best interests of the company, exercising due care and diligence, and avoiding conflicts of interest.
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Participation in Shareholder Meetings:
Subscribers, now shareholders, are entitled to participate in shareholder meetings such as Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs). They should actively engage in the decision-making process of the company by attending and voting at these meetings.
