Alteration of articles of association

Pvt ltd 1005 views 5 replies

prathiba

company secretary

259 Points Joined June 2008

A private limited company wants to forfeit shares of some of its members and re-issue them to new allottees. The articles of the company is silent about the applicability of table A. It also does not provide for the forfeiture of shares . It merely says that the

"The Directors may accept on behalf or for the benefit of the Company surrender of any shares liable for forfeiture so far as the law permits.":

As the AOA does not provide for forfeiture nor speaks about the applicability of Table A, should we first alter the AOA and provide for forfeiture, or proceed with forfeiture without alteration of AOA.

Replies (5)

CS Mitesh Mehta

Company Secretary

17139 Points Joined January 2009

Articles often provide for forfeiture of shares for non-payment of any call or installment of a call. Shares can be forfeited for non-payment of any call or installment of a call if and only if special and clear power in the articles is given to the directors to do so.

Guest

First alter your AOA and proceed further.

CS Ankur Srivastava

Company Secretary & Compliance Officer

17858 Points Joined November 2008

First your should alter your articles and provide clear provisions for the buyback of shares or Adopt Table A by ways of passing special resolution then proceed for Buy Back.

prathiba

company secretary

259 Points Joined June 2008

thank you all for your expert opinion. I shall proceed accordingly

Jatin Agrawal

130 Points Joined December 2008

i am facing a similiar problem as explained by ms. smitha.

is it possible, that instead of going for share forfeiture as currently the MoA doesn't allow, the defaulting shareholders(willingly) surrender the shares, post surrender, the surrendered shares are re-allotted.

also,

suppose if i want ot forfeit shares in june 2011, if i alter my memorandum via a special resolution dated june 2011 and file form 23 in aug 2012 for intimation of special resolution with penalty for late filing, will the alteration be effective from july 2011 or aug 2012,consequently affecting my intended share forfeiture of june 2011.

also am i correct that no specific form need to be filed with RoC for share forfeiture?