PROCESS OF ALTERATION IN ARTICLE OF ASSOCIATION
PROCESS OF ALTERATION IN ARTICLE OF ASSOCIATION
SHORT SUMMARY:
The
articles of association of a company are its by-laws or rules and regulations
which govern the management of its internal affairs and the conduct of its
business. They are framed with the object of carrying out the aims and objects
as set out in the Memorandum of Association
This
section corresponds to section 31 of the Companies Act, 1956, section 20 of
theIndian Companies Act, 1913, section 10 of the English Companies Act, 1948
and section9 of the English Companies Act, 1985. It has been made effective
from 1-4-2014 videNotification No. SO 902(E), dated 26-3-2014
INTRODUCTION:
Any
Company which intended to make any change to the Article of Association (AOA)
of its company, will have to comply with the provisions of Section- 14 of
Companies Act, 2013 and any other applicable provisions of the Act and
applicable rules.
Company
can alter its Article by way of addition, deletion, modification, substitution,
or in any other way, only if it wants.
Note:
* Every alteration made in the articles
of a company shall be noted in every copy of the memorandum or articles, as the
case may be
STEPS FOR ALTERATION
IN ARTICLE OF ASSOCIATION:
STEP – I: Convey Board Meeting of Directors: (As
per section 173 and SS-1)
To alter the Article of association of Company By giving
Notice of at least 7 days.
STEP –II: Held Board Meeting: (As per section
173 and SS-1)
§ At the Board meeting, the given
resolutions in respect of alteration in AOA must be passed.
§ Get Approval to Alteration in Article
of Association and recommending the proposal for members' consideration by way
of special resolution.
§ Fixing the date, time, and venue of the
general meeting and authorizing a director or any other person to send the
notice for the same to the members.
STEP- III: Issue
Notice of General Meeting: (Section 101)
Notice of EGM shall be given at least 21 days before the actual date of EGM. EGM
can be called on Shorter Notice with the consent of atleast majority in number
and ninety five percent of such part of the paid up share capital of the company giving a right to vote at
such a meeting:
§ All the Directors.
§ Members
§ Auditors of Company
The notice shall specify the place,
date, day and time of the meeting and contain a statement on the business to be
transacted at the EGM
STEP- IV: Hold General
Meeting: (Section 101)
§ Check the Quorum.
§ Check whether auditor is present, if
not. Then Leave of absence is Granted or Not. (As per Section- 146).
§ Pass Special
Resolution.[Section-114(2)]
§ Approval of Alteration in AOA.
STEP- V: Filing of
form with ROC: (Section 117)
File Form MGT-14 (Filing of Resolutions and
agreements to the Registrar under section117) with the Registrar along with the
requisite filing within 30 days of passing the special resolution, along with
given documents:-
§ Certified True Copies of the Special
Resolutions along with explanatory statement;
§ Copy of the Notice of meeting send to
members along with all the annexure;
§ A printed copy of the Altered Article
of Associations
A.
Whether Stamp Duty required to pain
on Alteration in Article of Association (AOA)?
The Act does not contemplate new articles of
association, and where it purports to be
so, it is nothing more than a special resolution
and as such does not require to bestamped.
B.
Whether mistake in Article of
Association can be ratify by the Court?
A mistake, whether clerical or any other, in the
articles of a company can only be rectified by altering the articles by special
resolution in accordance with this section. It cannot be set right by
application to Court. Evans v. Chapman, (1902) 96 LT 381; Scott
v. Frank F. Scott (London) Ltd., (1940) 3 All ER 509 : (1941) 11 Com
Cases 127 (CA). See also SARKAR SPECIFIC RELIEFACT, Edn. 1997 section 26(l).
(Author – CS Divesh
Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi
and can be contacted at csdiveshgoyal@gmail.com). Disclaimer: The entire
contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION
WITH THE USE OF THE INFORMATION
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