Company Law and Secretarial Practice

8/8/2019 Company Law and Secretarial Practice

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COMPANY LAW AND

SECRETARIAL PRACTICEAlteration of memorandum ofassociation

- Pallavi Joshi

- Sowmya A Swith guidance of S.P.Sir


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INTRODUCTION


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The purpose of Memorandum ofAssociation is to enable the share holders,

creditors and those who deal with the

company to know what its permittedrange of enterprise is.

- Lord Macmillan

MEMORANDUM OF

ASSOCIATION


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Six Clauses

CONTENTS OF MEMORANDUM OF

ASSOCIATION

Name Registeredoffice

Liability CapitalAssociation

or subscription

Objects


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AS PER SEC. 16

a company shall not alter theconditions contained in its

memorandum, except in thecases, in the mode, and to theextent, for which expressprovision is made in theCompanies Act.


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ALTERATION OF THE NAME CLAUSE:

When a company is registered with a name which

is identical with or similar to the name of an

existing company by mistake.

When central government directs a company to

change its name.

When a company wants to change its name of itsown accord.

When a company wants to add or delete the word

private from its name.


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ALTERATION OF

REGISTERED OFFICECLAUSE Change of registered office within

the same city. Change of registered office within

the same state.

Only the change of registered officefrom one state to another involves

alteration of the memorandum.


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ALTERATION OF OBJECT CLAUSE:

Purposes:

To carry on its business more economically.

To attain its main purpose by new means.

To enlarge its local area of operation.

To amalgamate the company with any other

company.

To sell or dispose of the whole or any part of the

undertaking of the company.


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Passing of special resolution at the extraordinary general

meeting.

Filing of a copy of the special resolution with the Registrar.

Obtaining the confirmation of the company law board.Filing of a certified copy of confirmation order of the company

law board with the Registrar.

Filing of the altered copy of the memorandum of association

with the Registrar.

Obtaining the certificate of registration of the change.

PROCEDURE:


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DOCTRINE OF ULTRA VIRES

2 Latin words ultra and vires.

Ultra means beyond.

Vires means powers.

ultra vires literally means doing an act which isbeyond the legal powers of a company.


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Acts ultra vires the directors.

Acts ultra vires the articles of

association.

Act ultra vires the memorandum ofassociation

3 CATEGORIES OF ULTRA VIRES :


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ALTERATION OF LIABILITY CLAUSE

The liability clause of a limited company cannotbe altered so as to make the liability of the membersunlimited.

However, the liability clause can be altered so asto make the liability of the directors, managingdirector or manager of the company unlimited.

And it may be noted that the unlimited liability ofthe members of an unlimited company may bechanged to limited company.


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Passing of special resolution.

Obtaining of consent of the directors, managingdirectors or manager.

Filing of a copy of the special resolution with theRegistrar.

Filing of an altered copy of the memorandum withthe Registrar.

PROCEDURE FOR ALTERING THE

LIABILITY OF DIRECTORS, MD OR

MANAGERS OF LIMITED COMPANY TO

UNLIMITED LIABILITY:


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Passing of a special resolution.

Obtaining the courts confirmation.

Filing of a copy of the special resolution with the Registrar.

Filing of a copy of the courts confirmation order with the

Registrar.

Obtaining the certificate of registration from the Registrar.

PROCEDURE FOR ALTERING THE

UNLIMITED LIABILITY OF THE

UNLIMITED COMPANY TO LIMITEDLIABILITY:


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ALTERATION OF CAPITAL

CLAUSE Alteration of share capital

Reduction of share capital

Variation of the rights of the

shareholders

Re-arrangement of share capital


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ALTERATION OF SHARE

CAPITAL It may increase its authorised share

capital.

It may consolidate or sub-divide the wholeor part of its existing shares into shares of

larger or smaller denominations.

It may convert its fully paid-up shares into

stock or vice versa.

It may cancel its unissued shares.


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REDUCTION OF SHARE CAPITAL

Reduction of share capital is

permitted for legitimate purposes only.

For instance, a co., may be allowed the

reduction of share capital-

To write off lost capital. To pay off surplus capital.


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VARIATION OF THE RIGHTS

OF SHAREHOLDERS

For ff cti g t is-

Memor mor rticles of t e co., must

ermit suc v ri tionof rig ts.

s eci l resolution s nctioningthe v ri tion

must e ssed t separatemeetingoftheshareholders ofthe class affected.


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PROCEDURE :

Authority of the articles to reduce capital must

be secured.

Special resolution must be passed. A petition to the court for an order confirming

the reduction must be made.

A certified copy of the Courts confirmation

order and changed memorandum must be

filed.


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RE-ARRANGEMENT OF SHARE

CAPITAL

this can be effected by- It can consolidate preference shares

and equity shares into one class of

equity shares.

OR

It can convert a part of equity sharesinto preference shares.


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Company Law and Secretarial Practice

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