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Alteration of MOA and AOA of a Company - Compliances
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When a company decides to modify its Memorandum of Association (MoA) and Articles of Association (AoA), it must adhere to the regulations and provisions outlined in the Companies Act, 2013. The process of altering the MoA and AoA of a private limited company or any other entity involves following specific procedures. Below, you will find a comprehensive guide on how to change the MoA and AoA of a company, including the necessary steps.
The MoA and AoA serve as crucial documents for all types of companies, such as Private Limited companies, Section 8 companies, public limited companies, limited liability partnerships, and others. While the procedures for amending the MoA and AoA may vary slightly, the fundamental principles remain consistent across different company structures.
Memorandum of Association (MoA) and Articles of Association (AoA) overview
Contents of the Memorandum of Association (MOA)
The Memorandum of Association (MOA) of the Company includes the following clauses:
Name Clause:
This clause, which is the first in every MOA, must state the Company's name with the suffix Private Limited, Limited, OPC Private Limited, based on the type of Company. This requirement does not apply to Section 8 Company.
Registered Address Clause:
This clause mentions the state in which the company’s registered office is located. While the specific address is not mandatory at the time of incorporation, it must be notified to the Registrar of Companies (RoC) within 30 days of incorporation.
The registered office serves as the official address for all communications, notices, and legal correspondence. It also determines the company’s jurisdiction for legal purposes.
Object Clause:
The object clause is one of the most important clauses of the MoA, as it specifies the main objectives and the incidental or ancillary activities the company intends to undertake. This clause is divided into:
Main Objects: The primary business activities of the company.
Incidental/Ancillary Objects: Activities necessary or supportive to achieve the main objectives.
Liability Clause:
This clause specifies the liability of the members of the company. It can be:
Limited by shares: The liability of members is limited to the unpaid amount on their shares.
Limited by guarantee: The liability is limited to the amount members have guaranteed to contribute in the event of winding up.
Unlimited: Members’ liability is not limited to any specific amount (used rarely).
This clause protects shareholders by limiting their financial exposure, especially in limited liability companies.
Capital Clause:
This final clause details the Company's capital. The Company must mention the Authorized Capital and the number of shares it is divided into. Authorized Capital represents the maximum fund the Company can raise.
Alteration of the Memorandum of Association (MOA)
To change the Memorandum of Association (MoA) in a company, follow the steps and comply with the procedures outlined below:
Step 1: Ensure that the notice for the Board Meeting is issued at least 7 days prior to the scheduled date for the change in MoA.
Step 2: Convene a Board Meeting to amend the MoA and pass a resolution unanimously, subject to shareholder approval.
Step 3: Set the date, time, and venue for the shareholder meeting, and designate a person to send out meeting notices to the shareholders.
Step 4: Dispatch the shareholder meeting notices at least 21 days before the scheduled Board Meeting date.
Step 5: Conduct the shareholder meeting and obtain majority approval for the resolution to change the company's MoA.
Step 6: File Form MGT-14, along with the approved resolution, updated MoA, and any other necessary documents, within 30 days of passing the resolution to amend the company's MoA.
Compliance Requirements for Alteration of MoA in a Company
Below are the Clauses covered by the Memorandum of Association for amendment:
Modification of Object Clause
Amendment of Share Capital
Transfer of Registered Office
Company Name Change
Adjustment of Members' Liability
List of Clauses Covered Under the Memorandum of Association (MOA)
The Articles of Association (AoA) of the company outline all the crucial rules and regulations governing the company. This document is vital as it encompasses all the details regarding the internal management of the company. Any modifications to the AoA require approval from both the board members and shareholders, along with the passing of a resolution to amend the company's AoA.
Alteration of the Articles of Association (AOA)
When altering the Articles of Association (AoA) in a company, there are several compliances that must be followed. To change the AoA of a company, the following steps should be taken:
Step-1: Ensure that the notice for the Board Meeting is issued at least 7 days before the meeting date for the alteration in AoA.
Step-2: Convene a Board Meeting to amend the AoA and pass a resolution unanimously, which also requires approval from the shareholders.
Step-3: Determine the Date, Time, and Venue for the shareholder meeting, and designate a person to send meeting notices to the shareholders.
Step-4: Dispatch the shareholder meeting notices at least 21 days prior to the scheduled Board Meeting date.
Step-5: Conduct the shareholder meeting and obtain approval from the majority of the shareholders to pass the resolution for changing the company's AoA.
Step-6: File Form MGT-14, along with the approved resolution, updated AoA, and any other necessary documents within 30 days of passing the resolution to amend the company's AoA.
Compliance Requirements for Alteration of Articles of Association (AoA) in a Company
To conclude, it is essential to emphasize that altering the AOA and MOA of a company involves following various legal processes and procedures. Changing the AOA and MOA of a company necessitates a thorough process, including holding board and shareholder meetings, obtaining approval from the majority of stakeholders, and submitting necessary forms with the updated AOA and MOA. We trust that you now have a clear understanding of the compliance requirements and procedures for changing the AOA and MOA of a company.
If you require any assistance with amending the MOA and AOA of a company, please do not hesitate to reach out to our Team at Corporate Shastra to simplify the process for you.
Conclusion
Can MOA and AOA be changed?
Yes, it is possible to change AOA and MOA of a company through the Board Resolution and taking consent from the shareholders as well.
What are the guidelines for alteration of articles of association?
Which form is filed for alteration of MOA?
What are the steps for alteration in articles of association?
What are the main clauses of the Memorandum of Association?