According to the Companies Act, 2013, every company is legally required to have MoA and AoA of the company. Here, MoA and AoA stands for Memorandum of Association and Article of Association. These are basically the legal documents of the company containing all the key points related to the functioning of company such as object of company, role, responsibilities of directors and members, name, registered address, authorized & paid up share capital of company and so on. MoA contains the clauses that govern the external affairs of company while AoA contains the clauses that govern the internal affairs and constitution of company.
Sometimes, these clauses are required to be altered due to various reasons like change in object clause or change in authorized share capital then these documents are required to be altered. For alteration of MoA and AoA, prescribed due process has to be observed.
In this blog, we will guide you about what is MoA and AoA and their alteration.
When MoA is required to be altered?
MOA must have following clauses for company incorporation and functioning of company –
- Name Clause- Name clause as the name suggests contains the approved name of company.
- Address Clause- In this registered office full address is required to be mentioned.
- Objects Clause– In this,the main objects of the company along with other matters necessary for the furtherance of main object are required to be written. Main object must be in consonance with the object provided while applying for name reservation.
- Liability Clause – In this, the liability of all the members of the company shall be written.
- Capital Clause- In this, the paid-up capital and authorized capital shall be provided.
Since the MoA has these 5 clauses thus the MoA is required to be altered only in case of alteration of these clauses only that are –
- Change in Company’s Name
- Change in place of Registered Office of Company
- Change in Main and/or subsidiary objects of Company
- Change in Company’s Authorized Capital
- Change in liability of Company’s members
What does AoA contain and when it is required to be altered?
While AoA majorly contains following clauses and thus AoA can be altered for the alteration of these clauses only.
- Details of First Directors and Subscribers of the Company
- Details of Share Capital
- Details of Transfer & Transmission of Shares
- Rights and Duties of Directors and Subscribers of Company to regulate their working
- Details and functioning of AGM, EGM and Board Meeting and voting rights of all members of company in such meeting and about veto power.
- Details of CEO, CS, Chief Financial Officer and Manager of the Company
- Details of procedure to be followed for dissolution of company
- Confidentiality clause- all board members are legally bound to obey this clause
- Details of Reserve and Dividends policies.
What is the process of alteration of MoA and AoA?
Step 1: Board Meeting
- The first step is to issue a 7 days prior notice of board meeting to the Board members in order to convene a Board Meeting for alteration of MoA and/or AoA.
- Next, convene the Board meeting on the date specified in the notice. In the Board meeting, a resolution for the alteration of MoA and/or AoA shall be presented and passed by majority of Board members.
Step 2: Shareholders Meeting
- Issue a 21 days prior notice to all the members of the Company and it shall fix a date, time and venue of the meeting.
- However, a shorter notice can also be issued for calling such meeting only when members holding 95% of total paid-up share capital of the company have consented to it.
- Hold the meeting of Shareholders and to pass special resolution of alteration of MoA and/or AoA by them.
Step 3: Submission of MGT-14
Lastly, the company shall file the Form MGT-14 along with certified true copy of special resolution&Explanatory Statement within 30 days from the date of passing of special resolution. The company shall attach the altered copy of MoA/ AoA and/or any other document required to be attached.
Alteration of MoA and AoA is required only when their clauses are being changed. We hope this blog have cleared all of your doubts related to alteration of MoA and AoA. In case you are looking for professionals help for Alteration of MoA and AoA then Contact your Trustworthy Advisors Manthan Experts just by calling at +9643969969.