Procedure for Alteration of Memorandum of Association (MOA)

A company who is desirous of altering its Memorandum of Association (MOA) will have to comply with the provisions of section 13 of the Companies Act, 2013, subject to the provisions as mentioned in sections 4, 15, 61 and 64.

Board of Directors' Approval

At first, the proposal to alter the memorandum for any specific purpose has to be considered at the meeting of the board of directors of the company.

If the board deems it fit that the alteration is in the best interest of the company, then the board may approve the concerned agenda in the meeting and pass the necessary resolution.

Shareholders' Approval

After the board resolution is passed, the general meeting of members of the company is called for and notice is circulated for considering the item of business on alteration of the memorandum of association along with an explanatory statement having notes on why it is being done.

The approval of the shareholders by passing a special resolution at a general meeting is necessary, except for the cases mentioned in section 61 where ordinary resolution is sufficient.

The company has to file Form No. MGT-14 with the ROC to register the special resolution for alteration of the memorandum.

Notice of alteration of the share capital shall be filed with ROC in Form No. SH.7 within 30 days.

Central Govt's Approval

In addition to the board and members approval, in the following cases, the central govt's approval is also necessary.

Change of Company's Name

In case of change in the name of a company, the central government approval is required and additional compliances as provided in sub-sections (2) and (3) of section 4 have to be carried out.

Exception: No approval is required where the only change in the name is deletion or addition of the word “Private” in the name of the company, consequent to a conversion of the company from one class to another.

The Central Govt has delegated powers to the Registrar of Companies. Refer MCA Notification S.O. 1353 (E) dated the 21st May, 2014.

Application to central govt for approval for change of company's name is filed in Form No. INC.24.

Change of Company's Registered Office

The approval of the central government is necessary in case of alteration for change in place of the registered office from one State/UT to another. Application is to be filed in Form No. INC.23.

The central government has to give approval or reject or feedback on it within 60 days of the date of application.

The consent of the creditors, debenture-holders and other persons may also be necessary. Or sufficient provision has to be made in this regard for the due discharge of all such debts and obligations or adequate security has to be provided for such discharge.

The certified copy of the approval order has to be filed with the ROCs of each concerned States in Form No. INC.28 within 30 days from the date of receipt of certified copy of the order.

The Central Govt has delegated powers to the Regional Directors. Refer MCA Notification S.O. 1352 (E) dated the 21st May, 2014.

An order made by the Govt under sub-section (4) read with sub-section (6) of section 62 has the effect of increasing authorised capital of a company. Notice of such alteration of share capital shall also be filed with ROC in Form No. SH.7 within 30 days.

NCLT Approval

Refer: Proviso to Section 61(1)(b)

In case, a limited company having a share capital:

• if so authorised by its articles;

• alters its memorandum in its general meeting;

• to consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;

• where such consolidation and division results in change in the voting percentage of shareholders;

• shall take the approval of the Tribunal as well.

Change of Object Clause

A company:

• which has raised money through a prospectus from the public;

• still has some unutilised amount out of the money so raised;

• shall not change its objects for which it raised the money;

• unless a special resolution is passed by the company;

• the details as prescribed in Rule 32 of the Companies (Incorporation) Rules, 2014 in relation to the resolution, indicating therein the justification for such change, shall be published:

- in an English newspaper and a newspaper in vernacular language, which is in circulation at the place where the registered office of the company is situated; and

- on the website of the company, if any;

• the dissenting members on such resolution have to be given an opportunity to exit, by the promoters and shareholders having control, in accordance with applicable SEBI regulations.

The company has to file Form No. MGT-14 to register the special resolution for alteration in objects clause.

Effective

Any alteration made in memorandum shall only be effective when it is duly registered in the records of the Registrar of Companies upon filing of necessary forms and documents.

Alteration to be void

In case of a company limited by guarantee and not having a share capital:

• any alteration of the MOA;

• purporting to give any person (otherwise than as a member);

• a right to participate in the divisible profits of the company;

• shall be void.