Alteration of Article

Section 31 of the Companies Act states that the amendment of any provision in the articles will requires a special resolution of members.

Section 31 of the Companies Act states that the amendment of any provision in the articles will requires a special resolution of members. A company is free to incorporate under different articles of association, or to amend its articles of association at any time by a special resolution of its shareholders, provided that they meet the requirements and restrictions of the Companies Acts. In business or commercial law, special resolution is a resolution passed by the shareholders of a company by a greater majority than is required to pass an ordinary resolution. The precise figures vary in different countries, but commonly an extraordinary resolution must be affirmed by not less than 75% of members’ casting votes, whereas an ordinary resolution only requires a bare majority.

Any alteration so made shall, subject to the provisions of this Act, be as valid as if originally contained in the articles and be subject in like manner to alteration by special resolution. Where a company has passed a resolution to amend or repeal its articles, that

The alteration of company’s articles is also subject to some limitation on the members’ voting power. The member must vote in the best interests of the company as a whole. Although a member may exercise his votes freely, it must not result in the oppression of other members or be tainted with male fide. There are majority shareholders altering the articles due to the prejudice of minority. To prevent this to happen, therefore alteration of company’s articles had subjected some limitation on member’s voting power. The court will not going to interfere the freedom of voting of the shareholders, unless unreasonable decision is made.

What is the Procedure for alteration in AOA under Companies Act

  • Call a Board Meeting to alter the Article of association of Company By giving Notice of at least 7 days.
  • In the Board Meeting the following activity done
    • At the Board meeting, the given resolutions must be passed:-
    • Get Approval to Alteration in Article of Association and recommending the proposal for members’ consideration by way of special resolution.
    • Fixing the date, time, and venue of the general meeting and authorizing a director or any other person to send the notice for the same to the members.
    • Provisions of the Section 101 of the Companies Act 2013 provides for issue of notice of EGM in writing to below mentions at least 21 days before the actual date of the EGM :
      • All the Directors.
      • Members
      • Auditors of Company
    • The notice shall specify the place, date, day and time of the meeting and contain a statement on the business to be transacted at the EGM.
  • Convene a general meeting:
    • Check the Quorum.
    • Check whether auditor is present, if not. Then Leave of absence is Granted or Not. (As per Section- 146).
    • Pass Special Resolution.[Section-114(2)]
    • Approval of Alteration in AOA.
  • Filing and fees: MGT-14 (Filing of Resolutions and agreements to the Registrar under section 117) with the Registrar along with the requisite filing within 30 days of passing the special resolution, along with given documents

Documents required for AOA amendment

  • Certified True Copies of the Special Resolutions along with explanatory statement;
  • Copy of the Notice of meeting sends to members along with all the annexure;
  • A printed copy of the Altered Article of Associations.
  • Notice for Board meeting
  • Board Resolutions
  • Minutes of the Board Meeting
  • Notice of EGM
  • Special resolution of EGM
  • MGT 14
  • Approved by Secretary
  • Sanctioned True copy related to Special Resolution
  • Changed Memorandum of Association
  • Authorized True copy of Board Resolution may perhaps be appended a non- obligatory attachment.

Frequently Asked Questions

What is the AOA of the company?

Article of association of the company is charter document of the company.

AOA can be change by the Company?

Yes if the company need any modification in AOA at any point of time they can be amend it.

What are the Contents Of Articles Of Association?

Articles usually contain provisions relating to the following matters- 1. Share capital including sub division thereof, rights of various shareholders, the relationship of these rights, payment of commission, share certificates, 2. Lien of shares 3. Calls on shares 4. Transfer of shares 5. Transmission of shares 6. Forfeiture of shares 7. Surrender of shares 8. Conversion of shares into stock 9. Share warrant 10. Alteration of capital 11. General meetings and proceedings thereat 12. Voting rights of members, voting by poll, proxies 13. Directors, including first directors or directors for life, their appointment, remuneration, qualifications, powers and proceedings of Board of directors’

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