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explanatory statement

Asif Khan (Taxation executive) (410 Points)

11 July 2009

pls forward me the format of the explanatory statement to be attached to the notice as per section 173 of the companies act, 1956

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8 Replies

Vaibhav Shukla (Company Secretary) (142 Points)
Replied 11 July 2009

Kindly specify the required section of the companies act, for which explanatory statement is required to be annexed to the notice calling Gen. meeting..

S. 173 (2) every special business require explanatory statement annexed to the notice calling General meeting.

Kindly specify your business.

Regards,

Vaibhav

Asif Khan (Taxation executive) (410 Points)
Replied 11 July 2009

dear vaibhav

the business to be transacted is regarding alteration of articles

Vaibhav Shukla (Company Secretary) (142 Points)
Replied 11 July 2009

Can u jus tell wat is the reason behind the said alteration in AOA as it can be altered for different purposes. there is no said pattern for. Ex. Statement. We just have to state the reason behind the respective altertaion in AOA or in any other business. However this example may serve ur purpose.

For ex. in case of increase in Authorised capital with corresponding changes to be made in AOA (i.e. alteration in AOA)

As required by section 173(2) of the Companies Act, 1956, the explanatory statement sets out all material facts concerning the Special Business referred to in Item no. __ & __ of the accompanying notice dated _________

ITEM NO. ....... & .......

In view of the present size of the company’s operation and its future requirement of capital, it is proposed to increase the Authorised Capital from Rs................/- (Rupees ....................) to Rs. ........................./- (Rupees .................). The increased share capital of Rs .................(Rupees..............) will consist of ...................(................) Equity Shares of Rs 10/- each. The necessary amendment in the Memorandum and Articles of Association are proposed to reflect the enhanced Authorised Capital.

As per the provisions of Section 94 read with the other applicable provisions, the Authorised Capital of the company can be increased by the shareholders. Therefore, the necessary resolution as per Item no. ..... is being placed before you. Further, the Articles of Association can be amended by Special Resolution. In order to reflect the enhanced Authorised Capital in Articles, your approval by way of Special Resolution in item no. ...... is being obtained to substitute the clause .......of the Articles of Association. Thus, the same is consequential amendment.

The copy of Memorandum and Articles of Association of the company is open for inspection of the shareholders at the registered office of the company during working hours except on holidays.

None of the directors of the company is in any way interested or concerned in the resolutions.

Regards,

Vaibhav

1 Like

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 11 July 2009

Dera Asif,

Mr. Vaibhav has correctly pointed out that there is no set format for Explanatory Statements to be mandatorily annexed with every Special Business under Section 173(2). You have to simply state the reasons behind passing such resolution and some of the requirements for it. Then you have to specify the interest of the Directors in passing the said resolution. Thats it.

vijay kumar chopra (article) (23 Points)
Replied 22 March 2011

MR VAIBHAV SUKHLA

IF THERE IS CLAUSE IN AOA TO INCREASE OF AUTHORISED CAPITAL SHALL BE AS PER CLAUSE V OF THE MOA

THERE IS ANY REQUIREMENTS OF ANY ALTERATION OF AOA

THANKS AND REGARDS

CA VIJAYKUMAR CHOPRA

larora@legislegal.net (Associate) (21 Points)
Replied 07 June 2011

Is it compulsory for a private company which is not a subsidiary of a public company to annex the explanatory statement to the notice calling the general meeting ?