AOA
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 June 2011
What is the procedure to alter Arlicle of Association....
Thanks/Regards..
Mohd.S Ali
Thanks/Regards..
Mohd.S Ali
30 June 2011
The powers to alter the Articles are a statutory right of members and the articles cannot provide that it will remain unaltered. Alteration of Articles of association is far easy as compared to the alteration of Memorandum of Association of the company. If the Articles themselves contain a provision to the effect that the regulations contained therein are unalterable, then such provisions will be illegal and bad in law and shall render void the statutory powers as conferred upon a company by section 31. Further, any thing contained in the Articles or Memorandum of Association or by any separate contract, which bans alteration of the Articles of Association is also void and is inoperative and the provisions of the Act will prevail.
30 June 2011
Section 31 of the Act provides that subject to the provisions of the Companies Act, 1956 and to the conditions contained in the Memorandum of Association, a company may by special resolution alter its Articles.
No requirement for approval of the Registrar of Companies for Alteration of Articles of Association. A company may simply alter its articles by passing a special resolution in the general meeting. However, where the alteration relates to change of a public company into a private company or vice versa, shall have no effect unless the approval of the Central Government has been obtained (powers have been delegated to the Registrar of Companies).
No requirement for approval of the Registrar of Companies for Alteration of Articles of Association. A company may simply alter its articles by passing a special resolution in the general meeting. However, where the alteration relates to change of a public company into a private company or vice versa, shall have no effect unless the approval of the Central Government has been obtained (powers have been delegated to the Registrar of Companies).
30 June 2011
Filing of e-Form 23
E-Form 23 is required to be filed electronically with the digital signature of managing director or whole-time director or director or manager or secretary of the company together with the certified copy of the amended Articles, special resolution and explanatory statement in the PDF file within a period of 30 days from the date of special resolution passed by the company in its general meeting. E-Form 23 is also required to be certified by chartered accountant or company secretary or cost accountant in practice before filing.
Replacement of Articles of Association
The Department has clarified vide Letter No. 8/32(31)/63-PR, dated 23-10-1963 that a company can never replace its articles, it is only the regulations contained therein which may be changed. Therefore, the company can adopt an entire new set of regulations in place of those now contained in its existing articles by passing a special resolution to that effect as per provisions of section 31 of the Act.
This type of requirements generally arises only at the time of conversion of a private limited company into public limited company or vice versa or by an existing public limited company to incorporate provisions relating to stock exchange listing norms or to incorporate the provisions relating to D-mat of shares, nomination for shares, postal ballot, buy back of shares etc. to fulfill the requirement of the amendments made under the Companies Act, 1956 and the rules and regulations made thereunder by the Central Government.
The new set of the proposed Articles should form a part of the special resolution and the proper explanatory statement should be annexed to the notice of the general meeting under section 173(2) of the Companies Act and should set out all material facts concerning the proposed alteration in the existing Articles.
E-Form 23 is required to be filed electronically with the digital signature of managing director or whole-time director or director or manager or secretary of the company together with the certified copy of the amended Articles, special resolution and explanatory statement in the PDF file within a period of 30 days from the date of special resolution passed by the company in its general meeting. E-Form 23 is also required to be certified by chartered accountant or company secretary or cost accountant in practice before filing.
Replacement of Articles of Association
The Department has clarified vide Letter No. 8/32(31)/63-PR, dated 23-10-1963 that a company can never replace its articles, it is only the regulations contained therein which may be changed. Therefore, the company can adopt an entire new set of regulations in place of those now contained in its existing articles by passing a special resolution to that effect as per provisions of section 31 of the Act.
This type of requirements generally arises only at the time of conversion of a private limited company into public limited company or vice versa or by an existing public limited company to incorporate provisions relating to stock exchange listing norms or to incorporate the provisions relating to D-mat of shares, nomination for shares, postal ballot, buy back of shares etc. to fulfill the requirement of the amendments made under the Companies Act, 1956 and the rules and regulations made thereunder by the Central Government.
The new set of the proposed Articles should form a part of the special resolution and the proper explanatory statement should be annexed to the notice of the general meeting under section 173(2) of the Companies Act and should set out all material facts concerning the proposed alteration in the existing Articles.
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