Any company incorporated under the Companies Act, 2013, is governed by the Act itself and its internal regulations, which are outlined in its Memorandum of Association (MoA) and Articles of Association (AoA). While the MoA defines the company’s scope, objectives, and fundamental details, the AoA lays down the rules for the company’s internal management. Over time, companies may need to amend these documents to align with business expansion, regulatory compliance, or structural changes.
The MoA primarily includes:
• Name Clause: Defines the legal name of the company.
• Registered Office Clause: Specifies the company’s registered address.
• Object Clause: Outlines the primary and ancillary business objectives.
• Liability Clause: Defines liability limitation for members.
• Capital Clause: Declares the authorized share capital.
• Subscription Clause: Lists the initial shareholders and their shareholding.
The AoA governs the internal management and operational framework, covering:
• Share Capital and Variation of Rights
• Lien on Shares
• Calls on Shares
• Transfer and Transmission of Shares
• Alteration of Capital
• Buyback of Shares
• General Meetings and Board Proceedings
• Voting Rights and Proxy
• Appointment and Powers of Directors, CEO, CFO, and Manager
• Dividend, Reserve, and Accounts
• Winding Up Procedures
• Indemnity Clause
The decision to alter MoA or AoA depends on various factors, such as:
• Change in business objectives.
• Change in company structure or management.
• Increase or decrease in authorized capital.
• Business expansion or geographical relocation.
• Regulatory compliance updates.
• Issue a notice at least seven days before the Board Meeting.
• Pass a Board Resolution approving the amendment and authorizing a director to file necessary forms.
• Approve the notice for convening an Extraordinary General Meeting (EGM).
• Conduct an EGM and pass a Special Resolution.
• Authorize a director to submit the required forms to the Registrar of Companies (RoC).
• Within 30 days of passing the resolution, file Form MGT-14 on the MCA Portal.
• Attach supporting documents, including:
o Copy of the Board Resolution.
o Copy of the Special Resolution.
o Amended MoA/AoA.
• Upon verification, the RoC approves the amendment.
• The company must:
o Update all copies of the MoA and AoA.
o Inform relevant authorities (GST, Income Tax, Banks, etc.).
Example:
ABC Pvt. Ltd. started as a trading company but later decided to enter manufacturing. To align with this, the Object Clause of its MoA was amended. The Board passed the resolution, an EGM was held, and Form MGT-14 was filed. Within 30 days, RoC approved the changes, and ABC Pvt. Ltd. successfully expanded its operations.
Example:
XYZ Pvt. Ltd. wishes to raise capital and to govern the terms and conditions for operations of company and management function, Shareholders Agreement is required. To give effect to this capital raise and execution of shareholders agreement, amendment in MoA and AoA is required.
Amending the MoA and AoA is essential for companies to adapt to evolving business needs. A structured approach, compliance with the Companies Act, and timely filings ensure smooth transitions without legal complications.
For professional assistance, reach out to us on email: info@returnfilings.com or on whatsapp: https://wa.me/919910123091 to ensure all statutory obligations are met on time.
