Provisions relating to alteration of Memorandum of Association

Alteration in the Memorandum of Association can be carried out only by a special resolution at the Shareholders meeting. This is a complicated and lengthy procedure. So Memorandum must be very carefully prepared at the beginning itself.

Provisions relating to alteration of Memorandum

The following are the provisions related to alteration in Name Clause, Objects Clause, Liability Clause, Capital Clause and Subscription Clause.

1. Alteration of Name Clause in Memorandum of Association

A company may by passing a special resolution alter is name with the approval of the Central Government. If the alteration involves change of the name to private limited or public limited, permission of Central Government is not required.

In case a company has been registered with a name which resembles a name of an existing company, the Central Government may ask it to change its name. In such case ordinary resolution is sufficient.

The intimation of name change should be given to the Registrar who will issue a fresh certificate of incorporation. Alteration of Situation clause

1. In case registered office has to be shifted within the same city, town or village, a notice has to given to the Registrar within thirty day of the change.

2. In case registered office has to be shifted from one town to another town or one village to another village, a special resolution has to be passed.

3. A company can change its registered office from one State to another State for the following reasons:

  1. to carry on business more efficiently and economically;
  2. to achieve the important purpose of the company by sophisticated means;
  3. to expand its operations in the current location;
  4. to control any of the existing objects;
  5. to sell whole or part of the business undertaking;
  6. to amalgamate with other business or person.

In case, registered office has to be shifted from one State to another State, a special resolution has to be passed and approval from the Company Law Board has to be obtained by the company. The altered memorandum should be filed with the Registrar of the State from which the company is shifting and also to the Registrar of the State to which the company is shifted.

2. Alteration of Objects Clause in Memorandum of Association

A company can alter is objects clause by passing a special resolution. Alteration of objects clause can be done for the following reasons:

1. For the purpose of carrying on its business more economically and efficiently.

2. For the purpose of obtaining the main business of the company by new and improved means

3. For the purpose of enlarging or changing the local area of its operations.

4. For the purpose of carrying on some business, which may be conveniently or advantageously combined with the existing business.

5. For the purpose of abandoning any of the objects specified in the memorandum.

6. For the purpose of selling the whole or any part of the undertaking.

7. For the purpose of amalgamating with any other company.

3. Alteration of Liability Clause in Memorandum of Association

The liability clause can be altered only when a public company is converted to a private company.

4. Alteration of Capital Clause in Memorandum of Association

A company can alter its capital clause by passing an ordinary resolution in a general meeting. Alteration of capital may relate to:

  1. Sub division of shares
  2. consolidation of shares
  3. conversion of shares into stock and cancellation of unsubscribed capital.

Within thirty days of passing a resolution, the altered Articles and Memorandum have to be submitted to the Registrar.

5. Alteration of subscription clause in Memorandum of Association

The company can alter is subscription clause to make the liability of the directors appointed subsequent to the alteration as unlimited.

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