overriding power on AOA
This query is : Resolved
26 October 2010
Does central government have the power to override the provisions of AOA ?
For Eg : If there is NO provision in the Articles of association of the comp to issue shares on discount, but if the company has obtained a sanction from the govt regarding the same, what is the way ahead for the company ?
For Eg : If there is NO provision in the Articles of association of the comp to issue shares on discount, but if the company has obtained a sanction from the govt regarding the same, what is the way ahead for the company ?
26 October 2010
To solve this query we must understand the scheme of Law. For certain powers or activities power in AOA is must bcoz desired by companies act itself. For example reduction of share capital u/s 100.
On the other hand for few activities power in AOA is not required bcoz not desired by Act. For example issue of share on discount. For issue of share on discount simply follow the pre-conditions mentioned in section 79.
Normally CG cannot overrule AOA especially they are drafted in accordance with law.
To solve this query we must understand the scheme of Law. For certain powers or activities power in AOA is must bcoz desired by companies act itself. For example reduction of share capital u/s 100.
On the other hand for few activities power in AOA is not required bcoz not desired by Act. For example issue of share on discount. For issue of share on discount simply follow the pre-conditions mentioned in section 79.
Normally CG cannot overrule AOA especially they are drafted in accordance with law.
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26 October 2010
Hi Ankur.Thanks for the clarification.
Is it that the govt goes through the AOA of the company and then sanctions (discount on shares) ? How does it actually happen ?
Is it that the govt goes through the AOA of the company and then sanctions (discount on shares) ? How does it actually happen ?
27 October 2010
No gove doesn't go through the AOA. Your documentation like resolutiion and meeting should be legal.
Regards
Regards
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