Memorandum of Association and Articles of Association are two documents that are very important for the establishment of any entity. Therefore, if any alteration or modification needs to be made in any of these it is important that the prescribed procedure is followed properly. In this blog, we will tell you about certain points that you have to keep in mind while amending any of these.

In the Memorandum of Association, the following clauses are mentioned:

1.      The name of the Company

2.      The State in which the company has their registered office

3.      The Company’s main objects as well as the matters that are considered important in accordance with the same

4.      The Liability of the members of the Company

5.      The authorised share capital of the Company

According to the Companies Act 2013, if the company wants to alter their MoA they need to follow the following procedure:

1.      Section 13 lays down the procedure for altering the MoA of the Company.

2.      The Section is applicable to all types of Companies.

3.      You need to conduct a board meeting where you have to propose the changes and pass a special resolution for the same.

4.      In order to pass the special resolution, it is important that you give the notice of extraordinary general meeting to the members.In the said notice, you have to inform the members about the date, time, day and place of the meeting as well as mention about the business activities that will be conducted during the extraordinary general meeting.

5.      As per section 102 of the Companies Act, 2013, an explanatory statement needs to be attached with the notice for passing the special resolution in the said meeting. The reason behind the said clause being that alteration of the memorandum comes under the category of special business and hence the application of section 102.

6.      As the Special Resolution is passed by the shareholders for altering the memorandum of association, the company needs to file the same with the Registrar of Companies. Apart from that they also need to file form MGT 14 within 30 days of passing the resolution.

7.      With the Form MGT 14 you also need to attach a certified copy of the special resolution, the explanatory statement issued for the general meeting, the amended memorandum of association as well as the AoA. If the alteration is related to the change in name then, a copy of approval issued by the Central Government needs to be filed with the Registrar.

8.      Any alteration that you want to make will come into force until the same has been registered.

In case of Articles of Associations, Section 14 along with other relevant provisions of the Companies Act, 2013 will be applicable for altering any of the existing provisions.

Under Section 6 of the Companies Act, 2013 the procedure for adapting the new set of Articles of Associations as well as the memorandum has been given. The sub clause (b) of Section 6 states that:

“Any provision contained in the memorandum, articles, agreement or resolution shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be.”

This means that all the provisions which are mentioned under the old article of association will be treated as repugnant. In simple terms it will treated as inconsistent in accordance with the Companies Act 2013 and hence will be deemed void. Therefore, it is important that the AoA should be adopted in accordance with the provisions of the Companies Act 2013.