Alteration in Charter Documents of the Company Alteration of Memorandum of Association

  • Home
  • Alteration in Charter Documents of the Company Alteration of Memorandum of Association

TaxBlock | Nov 18, 2021 | Views 307426

Alteration in Charter Documents of the Company Alteration of Memorandum of Association

Alteration in Charter Documents of the Company Alteration of Memorandum of Association

Change in Name clause:

The name of the company can be changed by passing special resolution and with written approval of Central Government. Approval of Central Government is not required if the change relates to only addition or deletion of word Private to the name of the company.

Form MGT-14 has to be filed with the Registrar of Company after 30 days of passing special resolution. 

The change of name shall not be allowed to the company which has not filed Annual return or financial statement with the Registrar of Company or which has failed to pay matured deposit or debenture or interest thereon to anyone. 

All listed company which has decided to change their names shall be in addition to above condition have to satisfy following condition:

  • At least 50% of its total revenue in preceding 1 year period should be accounted by the new activity suggested by new company.
  • At least one year must have elapsed from the last name changed.

Change in Registered office clause:

1. Change within the same jurisdiction:

A company can change its registered office from one place to another within the local limit of the same city, town or village where it is situated by passing board resolution. This change of registered office does not involve the alteration of Memorandum of Association

2. Change from one jurisdiction to another within the same involving change of jurisdiction of Registrar of Company:

If the company wants to shift its registered office from one city to another ( For example from Pune to Mumbai) and which involves in change of jurisdiction of Registrar of Company, a special resolution has to be passed and must confirm by the regional director.

It also does not involve the alteration of Memorandum of Association.

Form MGT-14 has to be filed with the Registrar of Company within days of passing special resolution.

3. Change of Registered Office from one state to another state:

If company wants to shift its registered office from one state to another, a special resolution in general meeting has to be passed which must be in confirmation with Central Government

This change involves alteration in Memorandum of Association.

Form MGT-14 has to be filed with the Registrar of Company within days of passing special resolution.

Change of object clause:

A company my by passing a special resolution in general meeting alter the object of the company. Form MGT-14 has to be filed with the Registrar of Company within days of passing special resolution.

A company which has raise money from public through prospectus and has any unutilized amount out of money so raised, shall not change its object for which it is raised through prospectus unless:

1. The details of special resolution shall be published in newspaper one in English and one in Vernacular language of the city, town or village where the Registered Office of the company is situated.

2. The dissenting member shall be given the opportunity to exit by the promoter.

Change in Liability clause:

In general, liability clause of the company cannot be changed. Though, Section 18 of the Companies Act, 2013 permits the company to convert itself in some other class of company by alter its Memorandum of Association and Articles of Association.

Change in Capital clause:

Section 61 of the Companies Act, 2013 provides that a limited company having share capital by passing ordinary resolution in general meeting alter the capital clause of it Memorandum of Association.

As per Section 61(i) capital clause can be alter in any following ways:

1. By increasing its authorized share capital,

2. By converting fully paid shares into stock or vice versa,

3. By consolidating existing shares into share of large denomination.

As per Section 66 of the Act, company can reduce its share capital by passing special resolution which is confirm with National Company Law Tribunal.

The share capital of the company can be reduced in the following ways:

1. By redemption of preference shares as per Section 55 of the Act;

2. Through buy back of share as per Section 68 of the Act.

ALTERATION OF ARTICLE OF ASSOCIATION:

As per Section 14 of the Companies Act, 2013, a company may alter its Article of Association by passing Special resolution. 

Where Articles are altered in case of the converting public company into private company then approval of National Company Law Tribunal is also required in addition to Special resolution.

Restriction on alteration of Article of Association:

1. The articles must not exceed Memorandum of Association or conflict with Memorandum of Association.

2. It must not be inconsistent with any provision of Companies Act, 2013.

3. The alteration must not content anything which is illegal or against any of the public policy.

StudyCafe Membership

Join StudyCafe Membership. For More details about Membership Click Join Membership Button

Join Membership

In case of Any Doubt regarding Membership you can mail us at [email protected]

Join Studycafe's What's App Group or Telegram Channel for Latest Updates on Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"




Author Bio

My Recent Articles

What is Self- Assessment Tax?? What is income and what are the different source of income Alternate Minimum Tax or AMT Overview of Funding in Startups Minimum Alternate Tax (MAT) View All Posts

Leave a Reply