Alteration of MOA

 Alteration of MOA

According to section 4, the memorandum of association of every company must contain the following clauses:
The name of the company with ‘limited’ as the last word of the name in the case of a public limited company and with ‘private limited’ as the last word in the case of a private limited company.

The state in which the registered office of the company is to be situated.
The objects of the company to be mentioned.
In the case of companies with object not confined to one state, the states to whose territories the objects extend.

The liability of members is limited if the company is limited by shares or by guarantee. In the case of a company having a share capital, the amount of share capital with which the company proposes to be registered and its division into shares of a fixed amount. Procedure to alter Memorandum of Association through Special Resolution & Confirmation by Central Government (Section 13) for :

Change of registered office from one state to another.

Change in object clause of Company

A Company may, by Special Resolution alter  its MOA so as to change the place of its Registered Office from one State to another, or with respect to the objects of the Company so far as may be required to enable it-

(a) to carry on its business more economically or more efficiently; or (b) to attain its main purpose by new or improved means; or (c) to enlarge or change the local area of its operations; or (d) to carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the Company; or (e) to restrict or abandon any of the objects specified in MOA; or (f) to sell or dispose of the whole or any part of the undertaking, or of any of the undertakings, of the Company; or (g) to amalgamate with any other Company or body of persons.

The alteration of the provisions of MOA ( Memorandum Of Association ) relating to the change of the place of its Registered Office from one State to another shall not take effect unless it is confirmed by the Central Government on petition. The application shall be filed with Central Government in Form No. INC 23 along with fee and other necessary documents.

 

Before confirming the alteration, the Central Government must be satisfied-

that sufficient notice has been given to every debenture holder & to every other person or class of persons whose interests will (in the opinion of the Central Government) be affected by the alteration; & that, with respect to every creditor who, in the opinion of the Central Government, is entitled to object to the alteration, & who signifies his objection in the manner directed by the Central Government, either his consent to the alteration has been obtained or his debt or claim has been discharged or has been determined, or has been secured

Central Government may make an order confirming the alteration on such terms & conditions, if any, as it thinks fit, and may make such order as to costs as it thinks proper.

The certified copy of the order of the Central Government approving the Alteration of Memorandum for transfer of registered office from one state to other shall be filed in Form No. INC 28 along with fee as with the Registrar of the State within 30 days from the date of receipt of certified copy of the other.

o   Change of Registered Office within a State An application seeking confirmation from Regional Director shall be filed in Form No. INC 23 along with fee. No Company shall change the place of its Registered Office from one place to another within a State unless such change is confirmed by the Regional Director Confirmation of change of Registered Office shall be communicated to the Company within 4 weeks. Co shall file, with Registrar of Company a certified copy of the confirmation by the Regional Director for change of its Registered Office within 2 months from the date of confirmation, together with a printed copy of MOA as altered & the Registrar of Company shall register the same & certify the registration under his hand within 1 month from the date of filing of such document. Alteration has to be registered within three months.

CHANGE IN OBJECT CLAUSE [SECTION 13 (8) AND (9)]

Procedure is to be followed for alteration of objects clause of MOA under Section 13 read with Rule No.32 of Companies (Incorporation) Rules, 2014 and Rule No 22 (Postal Ballot, if applicable) of Companies (Management and Administration) Rules, 2014:

1. Issue not less than 7 days’ notice and agenda of Board meeting, or a shorter notice in case of urgent business, in writing to every director of the company at his address registered with the company and call a Board Meeting to consider the proposal of alteration of objects clause of memorandum of association of company. [Section 173(3)]. Also follow the procedure prescribed for issuing and signing of notice of Board Meeting.
2. Hold a meeting of Board of Directors-

• To pass the Board Resolution for approving the proposed amendments to the objects clause of MOA of the company subject to the approval of shareholders in General meeting.
• To delegate authority to any one director of the company to sign, certify and file the requisite forms with ROC and to do all such acts and deeds as may be necessary to give effect to the proposed alteration.
• To fix day, date, time and venue for holding the general meeting of the Company for passing a special resolution as required by section 13.
• To approve the draft notice of general meeting along with explanatory statement annexed to the notice as per requirement of the Section 102.
• To authorize the Director or Company Secretary to sign and issue notice of the general meeting.

3. If the company has raised money from public through prospectus and has any unutilized amount out of the money so raised, it shall follow the following additional steps for altering the objects clause of MOA of the Company:

(a) Pass special resolution for alteration of Object clause of Memorandum of Association by means of Postal Ballot only.

(b) Notice of the resolution for altering the objects shall contain the following particulars: total money received;

▪ total money utilized for the objects stated in the prospectus;

▪ unutilized amount out of the money so raised through prospectus,

 ▪ particulars of proposed alteration/ change in the objects;

▪ justification for the alteration/change;

▪ amount proposed to be utilized for the new objects;

▪ estimated financial impact of the proposed alteration on the earnings and cash flow of the company;

▪ other relevant information which is necessary for the members to take an informed decision on the proposed resolution;

▪ Place from where any interested person may obtain a copy of the notice of the resolution to be passed.

(c) Publish an advertisement, giving above mentioned details of special resolution to be passed, which shall be published simultaneously with the dispatch of postal ballot notices to shareholder at least once in a vernacular newspaper in the principal vernacular language and in English language in an English newspaper circulating at the place where the registered office of the company is situated and place it on the website of the Company if any, along with the justification for such change.

1. d) Give an opportunity to the dissenting shareholders to exit by the promoters and shareholders having control in accordance with regulations to be specified by the Securities and Exchange Board.
2. Send notice of the General meeting proposing the aforementioned special resolution to all the shareholders, directors, auditors and other persons entitled to receive it, by giving not less than clear 21 days’ notice or shorter notice, if consent for shorter notice is given by at least 95% of members entitled to vote at such meeting, either in writing or through electronic mode in accordance with Section 101 of the Act.
3. Hold a shareholders meeting on the date for the meeting and pass the Special Resolution for altering the object clause of Memorandum of Association by 3/4th majority in accordance with Section 114 (2) of the Act. Special Resolution shall be passed by means of Postal ballot, if company has more than 200 members or the company has raised money from public through prospectus and still has any unutilized amount out of the money so raised.
4. Follow the procedure prescribed for preparing, signing and compiling of minutes of General Meeting.
5. After passing special resolution, file a certified copy of special resolution with the Registrar in form MGT14 under Section 117 of the Act within 30 days of passing Special Resolution in general meeting along with the following attachments:

(a) Copy of Special Resolution passed along with explanatory statement.

(b) Notice for convening the General Meeting of the Company

 (c) Altered Memorandum of Association.

 (d) Shorter Notice Consent Letters from the members in case the General Meeting was convened and held at a shorter notice.

 (e) Any other attachment as may be considered as necessary in this regard.

 (f) The Registrar shall register the alteration of objects in Memorandum and certify the registration within a period of 30 days from the date of filing of the special resolution. [Section 13(9)]

 (g) Every Alteration made in the memorandum of the company shall be noted in every copy of the Memorandum of Association. [Section 15(1)]

Follow up:

1. I) The Registrar shall then accordingly register the alteration and issue a certificate which will  be the conclusive evidence that all the requirements with respect to the alteration have been duly complied with by the company.
2. II) The alteration shall be complete and effective only on the issue of certificate by the Registrar.

III) If the special resolution is not filed within 30 days from the date of passing of such Resolution, then additional fees will be levy as per Companies Act- 2013.

1. IV) Incorporate the alteration in every copy of the memorandum.

Note: As per Companies Act-2013 Ministry Prescribed new sets of Memorandum of Association as per sections of Companies Act, 2013. So it is advisable to adopt New sets of Memorandum of Association of company at the time of Alteration in Object Clause of Memorandum of Association.

• increasing the Authorised Capital of the Company

 

1. Check for Authorization in Articles: Section 61 of the Companies Act, 2013, mandates that for increasing the Authorised share capital, authorization in Articles of Association is a pre-condition.

If there is no such provision then the company has to take steps for alteration of its Articles of Association in accordance with the provision of Section 14 of the Companies Act, 2013, so as to insert the clause enabling increase in the authorised share capital.

2. Calling of Board Meeting :

(a)  Issue notice in accordance with the provisions of section 173(3) for convening a meeting of the Board of Directors.

 (b) To approve notice of EGM along with Agenda and explanatory statement pursuant to be annexed to the notice of General Meeting as per section 102(1) of the Companies Act, 2013;

 (c) To authorize the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM) as approved by the board under clause 2(c) mentioned above.

3. Issue Notice of the EGM : to all members, legal representative of deceased member, assignee of an insolvent member if any, directors and the auditors of the company in accordance with the provisions of Section 101.
4. Holding of general meeting: To hold the EGM on fixed date and pass the necessary ordinary resolution under section 61(1)(a) for increase in the authorized share capital of the Company.
5. ROC Form filing: File Form SH-7 within 30 days of passing of Ordinary Resolution with the concerned ROC, with prescribed fees and along with following attachments as desired by section 64 read with Rule 15 of the Companies (Share Capital and Debentures) Rules, 2014:
6. Notice of EGM;
7. Certified True copy of Ordinary Resolution along with the explanatory statement pursuant to Section 102 of the Act;
8. Altered Memorandum of Association.
9. Concerned ROC will check the e-form and attached documents and will approve the increase in authorize share capital.
10. The company shall file a notice in the prescribed form with the Registrar within a period of 30 days of alteration to its share capital along with a copy of altered Memorandum. [Section 64].
11. No need to pass Special Resolution for increase in authorised share capital. However, in case the alteration of capital clause of the Memorandum of Association of the company requires the alteration of the Articles of Association of the company then, the special resolution for the alteration of articles of association of the company be passed and form MGT-14 should also be filed for the filing of copy of such special resolution with the concerned Registrar within 30 days from the date of passing of such resolution along with the prescribed fees.

 

• Procedure for Alteration in Name Clause of Memorandum

1. Calling of Board Meeting

(a) Issue notice in accordance with the provisions of Section 173(3) of the Companies Act, 2013, for convening a meeting of the Board of Directors to consider the reason for changing name of the company and get its approval for change in name of the Company.

(b) Pass a Board Resolution authorizing the Company Secretary / Director to make the required application to the Registrar of Companies in Form INC-1.

 

2. Seeking name availability for proposed new name from the RoC

(a) As per Section 4(4) of the Act read with Rule-9 of Companies (Incorporation) Rules, 2014, application for the reservation / availability of name shall be in RUN along with prescribed fee of `1,000/- in selection of a Company name, it should be in accordance with name guidelines given in Rule-8 of Companies (Incorporation) Rules, 2014. However, as per Rule-9 substituted by the Companies (Incorporation) Amendment Rules, 2014, an application for reservation of name shall be made through the web service available at www.mca.gov.in by using RUN (Reserve Unique Name) along with fee Registrar, Central Registration Centre. as provided in the Companies (Registration Offices and Fees) Rules, 2014, which may either be approved or rejected, as the case may be, by the Registrar, Central Registration Centre.

 (b) The application in Form-RUN, to the ROC should have the documents as attachment

 

3. Obtaining ROC Approval and Name Availability Letter : name valid for a period of 60 days from the date on which the application for reservation was made.

 

4. Issue of Notice of Extra-ordinary General Meeting( EGM)

 

5. Holding of Extra ordinary General Meeting

 

6. ROC filings :

ROC filings as per Section 13(6), the Company is required to file Special Resolution passed by shareholders for alteration of Memorandum with concerned ROC and file Form MGT -14 (certified by a Practicing Professional i.e. CS / CA / CWA) within 30 days of passing the resolution with prescribed fees and along with following attachments:

• Certified True copy of Special Resolution along with explanatory statement pursuant to Section 102
  • Altered Memorandum of Association
  • Certified True copy of Special Resolution along with explanatory statement pursuant to Section 102 for the Alteration of Articles pursuant to alteration in the name clause of the Memorandum of Association of the company
  • Altered Articles of Association together with the application for the fresh certificate of incorporation in the new name of the company be made in form INC-24 to the Registrar within 30 days along with the prescribed fees and the following document should be attached along with such application: –
  • Minutes of the Member’s meeting
  • The copy of the Certificate of Incorporation along with the copy of the Altered MOA and AOA of the company may be attached to the form INC-24 as an optional attachment.

 

7. After scrutiny of the documents filed, the ROC shall issue a fresh certificate of incorporation digitally signed in Form INC-25.

 

8. Intimate all concerned persons / authorities about the changed name of the Company, particularly the Stock Exchanges, National Securities Depository Ltd., Central Depository Services (India) Ltd., statutory and other authorities like Inspector of Factories, Regional Provident Fund Commissioner, suppliers of raw materials, customers, banks, etc.

 

9. Arrange for a new Common Seal and have the same adopted at a meeting of the Board of directors and keep it under safe custody and get stationery printed with the new name and/or affix rubber stamp of the new name on all the existing documents. However, it is also to be noted that having the common seal is no longer mandatory requirement.

 

10. Get the new name of the Company painted on all the signboards or name boards wherever they are displayed.

 

11. Correct all records, registers including the Register of Members, every copy of Memorandum and Articles of Association, other books and documents pertaining to the company’s business and affairs to display the new name.

 

12. It is also to be noted that in every document as above-mentioned the company shall paint, affix or print as the case may be the former name or names so changed during the period of last two years. (First proviso to Section 12(3)) Name Change requirement under regulation 45 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

 

• All listed companies which decide to change their names shall be required to comply with the following conditions:

1. A time period of at least 1 year should have elapsed from the last name change.
2. At least 50% of its total revenue in the preceding 1year period should have been accounted for by the new activity suggested by the new name, or,
3. The amount invested in the new activity/project (Fixed Assets + Advances + Work in Progress + Inventories + Investments + Trade Receivables + Cash & Cash equivalents) is at least 50% of the assets of the company. The ‘advances’ shall include only those extended to contractors and suppliers towards execution of project, specific to new activity as reflected in the new name.

To confirm the compliance, the company would have to submit auditor’s certificate to the stock exchange.

4. The new name along with the old name shall be disclosed through the web sites of the respective stock exchange/s where the company is listed for a continuous period of one year, from the date of the last name change. (Regulation 46)

• If any listed entity has changed its activities which are not reflected in its name, it shall change its name in line with the activities within a period of six months from the change of activities in compliance of provisions as prescribed in the Companies Act, 2013. (Regulation 45)