Alteration
of Memorandum of Association of a Company
Contributed by Ms. Sneha Chaturvedi
MEANING of MOA :
The
expression “alter” means to modify/change
or vary; to make or become different in some respect.
As
per Section 2(3) of the Companies Act, 2013 (the Act) “alter” and “alteration”
shall include the making of additions, omissions and substitutions.
Following
are the cases where a company has to alter its Memorandum of Association (MOA) as
per provisions of Section 13 of the Act read with Companies (Incorporation)
Rules, 2014 (the Rules)
·
Change
of Name;
·
Alteration
of Authorized Capital
·
Change
in Objects, and
·
Shift
of Registered Office
Let us consider the above mentioned cases in brief:
è CHANGE IN NAME
A company desiring to change its name may do
so in accordance with the provisions of Section 13 read with Section 4 of the
Act by passing Special Resolution
and the name approved by the Ministry of Corporate Affairs (MCA) on prescribed
application. The power of the Central Government under Section 13(2) to approve
change in name has been delegated to Registrar of Companies (ROC).
However, if the change required is the
addition thereto or deletion there-from, of the word “Private”, consequent upon
conversion of a public company into a private company or vice versa, no such
approval of central Government is required.
è ALTERATION OF AUTHORIZED
CAPITAL
A Company seeking to issue shares by way of
Private Placement or Rights Issue or by any other prescribed methods, has to
check the Authorized Capital, as the issue cannot exceed the amount of
Authorized Capital. Thus in the view of the above, a Company may alter its
Authorized Capital i.e. Capital Clause by virtue of Section 13 read with
Section 61 by passing an Ordinary
Resolution.
The
Capital Clause will be altered by prescribed process as per the applicable
rules and payment of relevant stamp duty as may be applicable and levied by
concerned state in which the registered office of the Company is situated.
è CHANGE IN OBJECTS
A company may change its objects as enshrined
in its MOA in accordance with the provisions of Section 13 of the Act.
Accordingly, any alteration of MOA with respect to the objects of the company
is permitted through Special Resolution.
However, Section 13 (8) restricts the change in object of a company which has raised money
from public through prospectus and still has any unutilised amount out of the
money so raised unless a special resolution is passed by the company and the
details of such resolution shall be published in one vernacular language and
one English language newspaper in circulation at the place of registered office
of the company as well as on the website of the company indicating the
justification for such change in the object.
è SHIFT IN REGISTERED OFFICE
As per Section 12 of the Act, every company
shall have a registered office at all times, to which all communications and
notices may be addressed.
Every company within 30days of its incorporation or any change in the address of
its registered office shall furnish a verification of its registered office in INC-22 prescribed under Companies
(Incorporation) Rules, 2014.
A company is permitted to change its
registered office from its existing location to another location-
·
Within the local limits of the
same city, town or village (e.g. Bandra, Mumbai to Andheri, Mumbai)
·
Outside the local limits of
the same city, town or village but
ü within
same state under jurisdiction of same ROC (e.g. Bandra, Mumbai to Kalyan)
ü under
jurisdiction of another ROC within same state (e.g. Mumbai to Pune)
·
One State to another State.
(e.g. Mumbai to Delhi)
Note: As per Section 13 (11) any alteration
of MOA, in the case of Company Limited by Guarantee or Company not having share
capital, purporting to give any person a right to participate in the divisible
profits of the Company otherwise than as member shall be void.
Ms. Sneha Chaturvedi
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