Section 5 of the Companies Act 2013 came into force w.e.f. 1st April 2014 (MCA notification dated 26th March 2014).
(1) Either on formation of a company, or
(2) by an amendment in the articles
(2.2) in the case of a public company by a special resolution.
It may be noted that the Stakeholders of private company may raise concern over the requirement of unanimous consent for amendment in Articles for addition of entrenchment clause.
Rule 10 of the Companies (Incorporation) Rules, 2014 prescribes the form and manner for notice to the ROC for articles containing provisions for entrenchment, which is as follows.
- At the time of incorporation of the company - notice to the Registrar of such provisions in Form No.INC.2 or Form No.INC.7 along with fees; or
- In case of existing companies - notice to the Registrar of such provisions in FormNo. MGT 14 along with fees within thirty days from the date of entrenchment of the articles.