Procedure for Alteration of Articles of Association (AOA)

Relevant Provisions

• Section 14 of the Companies Act, 2013

• Rule 33 of the Companies (Incorporation) Rules, 2014

Alteration of Articles

The articles of association of a company can be altered in different ways by:

• addition of a new article;

• deletion of an existing article;

• amendment of an existing article;

• adoption of a completely new set of articles.

Board Resolution

• Any proposed alteration(s) of the articles of association is at first considered in the meeting of the board of directors wherein it either gets approved or rejected.

• On approval by the board, a resolution is passed at the board meeting to the effect of altering the articles accordingly.

Special Resolution

• Once the board resolution is passed approving the alteration, the board calls for the general meeting of the members/shareholders for considering the item of business on alteration of the articles of association.

• In the notice of general meeting, an explanatory statement has to be included justifying the reasons for the alteration and passing of the special resolution.

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

Central Government Approval

• Any alteration in the articles having the effect of conversion of a public company into a private company shall not be valid unless it is approved by an order of the Central Govt.

• Form No. INC-27 has to be filed with the ROC within 15 days for filing an application for effecting the conversion.

Automatic Conversion of Private Company into Public Company

• If a private company alters its articles of association in such a manner that the articles no longer include the restrictions and limitations which are required to be included in the articles of a private company under the Companies Act, 2013. [refer to the definition of a private company under section 2(68)]

• Then in such cases the company shall cease to be a private company from the date of such alterations.

• The private company will automatically be considered as being converted to a public company.

• Form No. INC-27 has to be filed within 15 days for filing an application for effecting the conversion.

Procedure for Alteration

• Decision on what alteration has to be effected in the articles;

• Issue of notice of the board meeting for seeking directors' approval;

• Holding of board meeting and passing the board resolution for alteration;

• At the board meeting, fix the date of general meeting and approve draft notice;

• Issuing the notice of general meeting to the shareholders;

• Passing of special resolution at the general meeting;

• Filing of Form MGT-14 with ROC for registration of special resolution;

• Seeking approval of the Central Govt, if applicable;

• Filing of Form INC-27 in case of conversion cases.