Procedure for Alteration of Articles of Association (AOA)

Aakanksha Singhal

Aakanksha Singhal

Published on: Nov 30, 2020

Khushboo Sharma

Updated on: Dec 19, 2024

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Introduction

Article of Association is a document which is referred for internal administration of the Company as it contains the rules, regulations and bye-laws for general management. Articles means the articles of association of a company as originally framed or as altered from time to time or applied in pursuance of any previous company law or of this Act. [Section 2(5)]

Applicable Provisions:
Section 2, 5, 14, 15, & 173 of Companies Act, 2013

Companies need to alter their Articles of Association in following situations

1. Conversion of Private Company into Public Company [Refer Procedure for Conversion of Private Company into Public Company]
2. Conversion of Public Company into Private Company [Refer Procedure for Conversion of Public Company into Private Company]
3. Alteration in any of the existing Articles.

Mandatory Requirements

1. Company shall alter its Articles as per the provisions of Companies Act and the conditions contained in the Memorandum. [Section 14(1)]
2. The provisions for entrenchment of articles shall only be made either on formation of a company, or by an amendment in the articles agreed to by all the members of the company in the case of a private company and by a special resolution in the case of a public company. [Section 5(4)]
3. Company shall pass a Special Resolution for conversion of Public Company into Private Company and vice-versa.

Following Procedure is to be followed

1. Convene a Meeting of Board of Directors [As per Section 173 & Secretarial Standard (SS-1)]
   • Issue Notice of Board Meeting to all the Directors of Company at their addresses registered with the Company, at least 7 days before the date of Board Meeting. A shorter notice can be issued in case of urgent business.
   • Attach Agenda, Notes to Agenda and Draft Resolution with the Notice.
   • Hold a meeting of Board of Directors of the Company to consider and pass the necessary Board Resolution
     • for alteration of articles
     • to authorize Company Secretary or any Director to sign and file the relevant form with Registrar of Companies and to do such acts, deeds and things as may be necessary to give effect to the Board’s decision
     • to fix the day, date, time and venue of the General Meeting and to approve the draft notice convening the General Meeting along with explanatory statement annexed to the notice as per requirement of the Section 102 of the Companies Act, 2013 and authorize the Director or Company Secretary to sign and issue notice of General Meeting.
   • Prepare and Circulate Draft Minutes within 15 days from the conclusion of the Board Meeting, by Hand/Speed Post/Registered Post/Courier/E-mail to all the Directors for their comments. [Refer the Procedure for Preparation and Signing of Minutes of Board Meeting]
2. Convene General Meeting [Section 96, 100 and Secretarial Standard (SS-2)]
   • Notice of General Meeting shall be given at least clear 21 days before the actual date of a General Meeting in writing, by hand or by ordinary post or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means or a Shorter Notice can be issued with the consent of at least 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 in accordance with Section 101.
   • Notice will be sent to all the Directors, Members, Auditors of Company, Secretarial Auditor, Debenture Trustees and to others who are entitled to receive the notice of the General Meeting.
   • Notice shall specify the day, date, time and full address of the venue of the Meeting and contain a statement on the business to be transacted at the Meeting.
   • Hold the General Meeting on fixed day and pass a Special Resolution for alteration of Articles of Association.
   • Listed Entity shall:
     • disclose the proceeding of General Meeting to the Stock Exchange, within 12 hours* from the occurrence of the event or information, in case the event or information is emanating from within the listed entity and
     • disclose details of e-voting results in the format specified by the Board, to Stock Exchange, within 2 working days of the conclusion of General Meeting.
     *Note: In case the event or information emanates from a decision taken in a meeting of board of directors, the same shall be disclosed within 30 minutes from the closure of such meeting as against the timeline indicated above.
   • Prepare the minutes of General Meeting, get them signed and compile accordingly. [Refer the Procedure for Preparation and Signing of Minutes of General Meeting]
3. Filing of Form MGT-14 with ROC [Section 117]
   File Form MGT-14 with the Registrar of Companies within 30 days of passing the Special resolution in the General Meeting, , along with following documents as an attachment
   • Certified True Copies of the Special Resolutions along with explanatory statement
   • Copy of the Notice of meeting sent to members along with all the annexure
   • Altered Articles including the provision of entrenchment inserted in the Articles, if any.
   • Copy of Attendance Sheet of General Meeting
   • Shorter Notice Consent, if any.
4. Alteration of Articles to be noted in every copy [Section 15(1)]
   Every alteration made in the articles of a company shall be noted in every copy of the articles.