Procedure for Alternation of Article under Companies Act, 2013

CS Divesh Goyal

ALTERATION IN ARTICLE OF ASSOCIATION

Section – 13 read with rule 29 of Companies (Incorporation) Rules, 2014

Any Company who is intending to make any change to the Article of Association (AOA) of its company, will have to comply with the provisions of Section- 14 of Companies Act, 2013 and any other applicable provisions of the Act including fulfillment of condition as may be contained in the Memorandum of Association (MOA) of Company.

Chapter II Incorporation of Company and Matters Incidental Thereto Provisions of the Companies Act, 2013: Section 14: Alteration of Article of Association.

Company can alter its Article by way of addition, deletion, modification, substitution, or in any other way, only if it wants:

STEPS FOR ALTERATION IN ARTICLE OF ASSOCIATION:

STEP-I

Convene A Board Meeting: To alter the Article of association of Company By giving Notice of at least 7 days.

STEP: II

Hold the Board Meeting:

• 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 atleast 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.

STEP-III

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.

STEP-IV

Filing and fees:

I) File FORM NO. 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:-

• Certified True Copies of the Special Resolutions along with explanatory statement;
• Copy of the Notice of meeting send to members along with all the annexure;
• A printed copy of the Altered Article of Associations.

STEP-V

Follow up:

I) The Registrar shall then accordingly register the alteration and issue a certificate which will  be the conclusive evidence that all the requirements with respect to the alteration have been duly complied with by the company.

II) The alteration shall be complete and effective only on the issue of certificate by the Registrar.

III) If the special resolution is not filed within 30 days from the date of passing of such Resolution, then additional fees will be levy as per Companies Act- 2013.

IV) Incorporate the alteration in every copy of the memorandum.

Note: As per Companies Act-2013 Ministry Prescribed new sets of Article of Association as per sections of Companies Act-2013. So it is advisable to adopt New sets of Article of Association of company at the time of Alteration in any Clause of Article of Association.

DRAFT

SAMPLE BOARD RESOLUTION FOR

Adoption of new set of Article of Associations of the Company

“RESOLVED THAT pursuant to the provisions of Section 14 and other applicable provisions, if any, of Companies Act, 2013, (including any statutory modifications or re-enactment thereof, for the time being in force), and the rules framed there under, consent of the Board of Directors of the Company be and is hereby accorded, subject to the approval of the Registrar of Companies, NCT of Delhi & Haryana and subject to the approval of Shareholders in General Meeting, to adopt new set of Article of Association of Company:

FURTHER RESOLVED THAT for the purpose of giving effect to this resolution, Mr. ABC, Director of the Company be and is hereby authorised, on behalf of the Company, to do all acts, deeds, matters and things as deem necessary, proper or desirable and to sign and execute all necessary documents, applications and returns for the purpose of giving effect to the aforesaid resolution along with filing of necessary E-form as return of appointment with the Registrar of Companies, NCT of Delhi and Haryana.”

SAMPLE SHAREHOLDERS RESOLUTION FOR:

Adoption of new set of Article of Associations of the Company

“RESOLVED THAT pursuant to the provisions of Section 14 and other applicable provisions, if any, of the Companies Act, 2013, (including any amendment thereto or re-enactment thereof), the Articles of Association of the Company be and are hereby altered by replacing all the existing regulations 1 to 49 with the new regulations 1 to 93, a copy of which is annexed to the explanatory statement, be and is hereby adopted as new regulations of the Articles of Association of the Company.”

“FURTHER RESOLVED THAT for the purpose of giving effect to this resolution, Mr. Sunil Khoria (DIN: 02874096), Director of the Company be and is hereby authorized, on behalf of the Company, to do all acts, deeds, matters and things as deem necessary, proper or desirable and to sign and execute all necessary documents, applications and returns for the purpose of giving effect to the aforesaid Resolution along with filing of necessary E-forms with the Registrar of Companies, West Bengal.”

EXPLANATORY STATEMENT:

The Existing regulations 1 to 49 of the Articles of Association are replaced by the new set of regulations 1 to 93 and adopted as new set of Articles of Association. The modification in the Articles of Association is carried out to give effect to the provisions of the Companies Act, 2013. Consent of the shareholders by passing a Special Resolution is required in this regard. New set of regulations 1 to 93 of Articles of Association is attached herewith separately as Annexure A.