Alteration of articles of association is a supreme legal document that is the basis of the company’s constitution. The Memorandum of Association (MOA) and Articles of Association (AOA) define a company’s scope of activity, objectives, rules, and regulations for internal management and relationship with the outside world.
Articles of Association (AOA) is a document containing all the rules and regulations of the company and defines the duties, powers, rights, and liabilities of persons associated with the organization. AOA is the subordinate document to the MOA of the company and the Companies Act, 2013, and Any provision in the AOA that contradicts the MOA and the Companies Act, 2013 is considered null and void.
The company intended to make any alteration of an article of Association (AOA), will have to comply with the provisions of Section- 14 of the Companies Act, 2013, applicable rules, and the conditions contained in its memorandum.
A company can alter its articles in any of the following manners:
Every change made in the articles of a company needs to be noted in every copy of the memorandum or articles of the company.
A company that proposes to alteration of articles of association has to follow the below-mentioned steps:
Convene and hold Board Meetings (As per section 173 and SS-1)
Issue notice of the general meeting
Issue notice of the general meeting along with the explanatory statement, to all the members, directors, and the auditor of the company.
Notice of General Meetings needs to be given at least clear 21 days before the actual date of General Meetings. General Meeting can be called on Shorter Notice with the consent of at least the majority in number and 95 % of the members have voting rights.
Convene and hold General Meeting to (Section 101)
Filing of Form MGT-14 with ROC
The company needs to file e-Form MGT-14 with ROC within 30 days from the date of passing Special Resolution at General Meeting along with fees as prescribed in The Companies (Registration offices and fees) Rules, 2014 and with the following attachment:
The e-Form MGT-14 is digitally signed by the company's Director/ Manager/Company Secretary/CEO/CFO.
The form will be processed in the non-STP mode for Alteration of Articles
ALTERATION OF MEMORANDUM OF ASSOCIATION OF A COMPANY
The company intended to make any alteration in the Memorandum of Association (MOA), will have to comply with the provisions of Section- 13 of the Companies Act, 2013 and other Applicable provisions of the Act and applicable rules.
The Memorandum of Association (MOA) has the following Clause in it:
The company may alter its MOA by way of alteration in the above clause of the Memorandum of Association.
CHANGE OF NAME OF A COMPANY
Company may change its name by special resolution and with the approval of the Central Government. The power of the Central Government under Section 13(2) has been delegated to the Registrar of Companies. However, the addition or deletion of the word “Private” in the of the company, consequent upon conversion of any one class of Companies to another class, no such approval of Central Government is required.
Condition for change of name of the company:
After filing form MGT-14, the company shall file Form INC – 24 with ROC within 30 days of passing of Special Resolution, along with the following documents
The e-Form INC-24 is digitally signed by the company's Director/ Manager/Company Secretary/CEO/CFO. The form will be processed by the Registrar of Companies in non-STP mode.
CHANGE OF OBJECTS OF A COMPANY
A company may change its objects as mentioned in its Memorandum of Association by passing a special resolution at the General Meetings of the company and If Company has more than 200 members, required to pass a special resolution by way of a postal ballot.
The company needs to file form MGT-14 with ROC within 30 days from the date of passing a special resolution. The change in objects of the company shall be effective only on registration of special resolution.
CHANGE OF CAPITAL CLAUSE OF A COMPANY
The capital Clause specifies the maximum capital that that company is permitted to raise and no company can raise capital that is higher than the amount specified in MOA.
According to Section 61(1), a limited company having a share capital may alter its capital clause in the following way:
Steps for alteration in Capital Clause of MOA
Make changes in the capital clause in all the copies of the memorandum and articles of association of the company.
Yes, you can get a copy of the AOA and MOA from the MCA portal. It is posted login services of MCA so that first you register MCA website, then click MCA services< Document related Services < Get a certified copy.
No, the subscription clause of MOA cannot be changed. Names of subscribers to the MOA cannot be changed because they were promoters of the company.
The word Ultra Vires means “beyond the powers of”. The MOA of the company defines the object for which the company is established. An act of the company cannot be beyond the object clause else it will be ultra vires. It cannot be resolved even if the shareholders pass a special resolution with the majority of the votes.
MOA describes the powers and objects of the Company and its relationship with the outside world, whereas, AOA defines the rules and regulations of the company and the duties, powers, rights, and liabilities of persons associated with the organization.
Alteration in MOA and AOA is required only when their clauses are being changed. The company can alter its AOA and MOA by way of addition, deletion, modification, or substitution of clauses.
The memorandum of association contains a name clause, registered office clause, objects clause, liability clause, capital clause, and subscription clause.