ALTERATION/ADDITION IN COMPANY

ALTERATION/ADDITION IN COMPANY

When a company needs to make significant alterations or additions, such as changing its name, expanding its business activities, or increasing its share capital, it must follow a formal legal process under the Companies Act, 2013. This involves amending the foundational documents of the company: the Memorandum of Association (MOA) and the Articles of Association (AOA). 

The general procedure for company alterations

The process for most alterations follows a standard, multi-step procedure: 

1. Convene a Board Meeting. The Board of Directors first meets to discuss and approve the proposed alteration. A board resolution is passed to authorize a director or company secretary to proceed with the necessary steps, including calling a general meeting of the shareholders.
2. Hold a General Meeting. A notice must be sent to all shareholders, directors, and auditors at least 21 days before the General Meeting (either an Annual General Meeting or an Extraordinary General Meeting). This notice must specify the purpose, time, and location of the meeting.
3. Pass a Special Resolution. At the General Meeting, shareholders must approve the alteration by passing a special resolution. A special resolution requires a vote of at least 75% of the members present and voting.
4. File with the Registrar of Companies (RoC). After the special resolution is passed, the company must file the necessary e-form (typically MGT-14) with the RoC within 30 days. Required attachments include the altered MOA/AOA, the special resolution, and the notice of the meeting.
5. Receive ROC approval. The RoC reviews the documents for compliance. Once satisfied, the RoC will register the alteration, and the change will become effective from the date of registration. 

Alteration based on the specific clause

The specific procedure for altering a company's profile depends on the nature of the change and the clauses in the MOA or AOA being altered. 

Change of Company Name

A change of company name requires a special resolution from shareholders and approval from the Central Government by filing e-Form INC-24. The process involves checking name availability, passing necessary resolutions, and filing forms MGT-14 and INC-24 with the RoC. Upon approval, the RoC issues a fresh Certificate of Incorporation, and the company must use both names for two years. 

Change of Registered Office

Changing the registered office location has varying procedures based on whether the move is within the same city, to a different RoC within the same state, or to a different state. Each scenario requires specific resolutions and filings, with interstate moves being the most complex. 

Alteration of Object Clause

Altering the object clause generally requires a special resolution and filing e-Form MGT-14 with the RoC. If the company has raised funds through a prospectus and has unutilized funds, it must also provide public notice of the change. A new Certificate of Incorporation is issued upon approval. 

Increase of Authorized Share Capital 

Increasing authorized share capital typically requires an ordinary resolution if allowed by the AOA. If not, the AOA must first be altered with a special resolution. E-Form SH-7 must be filed with the RoC within 30 days of the resolution. 

Alteration of Articles of Association (AOA)

Alterations to the AOA necessitate a special resolution by shareholders and the filing of e-Form MGT-14 with the RoC within 30 days. 

Final steps

Following RoC approval, companies must update their legal documents and notify relevant parties, including banks. The altered MOA/AOA should also be integrated into all company records.