Under Companies Act 2013 things to remember while changing Memorandum of Association (MOA) and Articles of association (AOA)
- In this article, we discuss the important points to remember when amending/changing MOA and AOA of a company.
- Following clauses are in Memorandum of Association.
- The name of the Company.
- In which Indian State where the registered office of the company is situated.
- The main objects of the company and matters which necessary are considered in furtherance thereof
- The liability of members of the Company.
- Authorized share capital of the Company.
Any modification in the MOA will be made only in these paragraphs either in all on any of this paragraph. These are the circumstances in which MOA and AOA are modified.
- Modification in the Company name.
- Register office of the Company is shifted to another place.
- Modification in the authorized capital of the Company.
- If the liability of the Company members change.
These are the procedure for alteration/modification in MOA under Company act 2013. Modification in the MOA can be made by the following, course under section 13 of Companies Act 2013.
- Company Act 2013 influence to all companies
- To passing a special resolution a board meeting of members is arranged.
- Special resolution to be passed in the general meeting should be reported. The notice will specify the date and day of the meeting location and include a statement on the business to be broadcast on EGM.
- Since the reshuffle of the memorandum is a special business therefore explanatory statement u/s 102 of the Companies Act 2013 shall be accompanied with the notice of the meeting in which special resolution is to be passed.
The change of any clause of memorandum of association requires the consent of the members through special resolution, except for the capital clause. However, in case of change of authorized alone capital, section 61 states that consent of members is required through general resolution. The company has to file a special resolution passed by the shareholders for modification of the memorandum with Register of Companies. Within 30 days of passing of resolution form, MGT-14 must be filed for registration of special resolution.
- A certified copy with special resolution and explanatory statement of the general meeting in which the motion is passed and the changed memorandum and articles are to be attached as an attachment in form MGT-14. Copy of approval from the central gov. filled with the registrar in case of a change in name and registered office clauses of the memorandum.
- The change made under section 13 will have no effect until the registration has been made.
The new set of Memorandum and Articles are adopted as per Companies Act 2013.
Here, one more thing to keep in mind while modification the Memorandum and Articles is that the Registrar may ask Companies to follow the new company Act 2013 to adopt a new set of Memorandum and Articles.
The main reason for this is the change in the format of Memorandum and Articles under the previous Act and the new Act 2013.
The main difference between the Memorandum under Companies Act 1956 and 2013 is the object clause. Whereas under the 1956 format, the object clauses consisted of 3 subsections.
- Main objects
- Incidental and ancillary objects and
- Other objects.
It includes only two clauses under the format of Companies Act 2013.
- THE OBJECTS TO BE PASSED BY THE COMPANY ON ITS INCORPORATION i.e MAIN OBJECTS
- Matters which are necessary for Furtherance of the Main objects.
Therefore it is appropriate for the Company while altering the object segment.
- Amending title of the object continent clauses of the Memorandum of association bypass the following resolution.
- 3(B) clause of the objects which is incidental or helpful to the receipt of the main objects of the Memorandum of Association and thereafter replaced with the “MATTERS WHICH ARE NECESSARY FOR FURTHERANCE OF THE OBJECTS SPECIFIED IN CLAUSE 3(B) ARE.
To remove the other objects clause of the memorandum.
- In accordance with the provisions of the Section 4,13 of the companies act 2013 and all other applicable provisions if any, and if necessary, other sections of the Memorandum of Association of other officers from the competent authorities shall be subject to necessary approval. Removing clause 3(C) of the company completely.
ADOPTION OF NEW SET OF ARTICLES OF ASSOCIATION
- As per the provision of Section 14 of the Companies Act 2013 and other applicable provisions, if any, the articles of Association of the Company should be changed, replacing all existing rules with new rules.
- The statutory support for adopting the newest of Memorandum and Articles is given in section 6 of the Companies Act 2013, which is given as follow;
- Any provision contained in a Memorandum, Articles, Agreement, or Reduction may be void to the extent that it responds to the provisions of this act, as the case may be.
- Therefore, the provision under the old Memorandum/Articles may be contradictory/inconsistent with the provisions of the Companies Act 2013 and hence may be called void therefore it is appropriate to adopt the Memorandum and set of Articles as per the Companies Act 2013.