Changes to MOA of Company

Changes to the Memorandum of Association (MOA) can be effectively carried out through a special resolution at the shareholders' meeting. Altering the MOA of a company is a detailed and complex procedure, requiring professional diligence. In this article, we explore the various grounds for modifying the MOA of a company.

Main Clauses of Memorandum of Association

A company can amend its memorandum by altering the following clauses in the Memorandum of Association:

Name Clause
Object Clause
Capital Clause
Registered Office Clause
Liability Clause
Subscription Clause

Alteration of Name in MOA

Changing the name of a company necessitates an alteration to the MOA by passing a special resolution. For a company name change, the consent or authorization of the Central Government is not needed for private or public limited companies. However, if a company's name is similar to an existing entity, the Central Government may require a name alteration, where an ordinary resolution would suffice.

Alteration of name cannot be permitted in cases of:

Failure to file annual returns or financial statements due with the Registrar
Non-payment or overdue payments on matured deposits, debentures, or interest

Change of Registered Office – State to State

For the transfer of registered office from one state to another, the company must amend its MOA. Reasons for such a transfer include:

Conducting business more professionally and economically
Achieving the company's significant purpose by advanced means
Expanding operations in the current location
Managing existing business objects
Selling a portion or the entire business enterprise
Merging with other businesses or entities

A special resolution must be approved, and the Company Law Board must greenlight the shift from one State to another. The amended memorandum needs filing with the respective State Registrars. Upon approval by the Registrar of Companies (ROC), the MOA must reflect the new state where the registered office is located.

Alteration of Objects Clause

Altering the object clause of a private limited company is straightforward. However, changes in a company that raised public funds require a special resolution. This decision must be published in English and a local language newspaper where the company registration office is based and on the company website if applicable, stating justifications for the change. A certified government order is filed with the RoC alongside the altered MOA within three months of issuance.

Dissenting shareholders must be provided an exit opportunity by the promoters in compliance with SEBI regulations.

Procedure for Alteration in Memorandum of Association

Convey Board Meeting of Directors

Step 1: Issue a notice for a board meeting to all directors at least 7 days before the meeting, including the agenda, notes, and draft resolutions.

Held Board Meeting

Step 2: The board meeting passes the resolutions related to the MOA alteration. Approval is obtained, fixing the board meeting details, and authorizing notifications to members for a special resolution.

Issue Notice of General Meeting

Step 3: Issue notice at least 21 days before EGM, or on shorter notice with member approval. Details should specify the location, date, time, and business to be discussed.

Hold General Meeting

Step 4: Verify quorum and auditor attendance; approve the MOA alteration by passing the Special Resolution.

Filing Form with ROC

Step 5: File the MGT-14 form with the Registrar within 30 days of the resolution, among these documents:

Certified copies of the Special Resolution with an explanatory statement
Copies of the notice and altered Memorandum of Assoc.

Alteration of Liability Clause

The liability clause may be revised to render director liability unlimited while maintaining shareholder liability limitations. The special resolution for this amendment is filed with the Registrar within a 30-day timeframe.

Alteration of Capital Clause

Changing the capital clause involves an ordinary resolution in a general meeting, affecting:

Subdivision of shares
Consolidation of shares
Conversion of shares into stock and annulling unsubscribed capital

Within thirty days post-resolution, submit revised Memorandum and Articles to the Registrar.

Alteration of Authorized Capital

Companies intending to issue shares must review the current authorized capital. Issuance should not exceed this amount. Hence, companies may need to increase the authorized capital and adjust the MOA accordingly.

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Frequently Asked Questions

Common questions about Alteration of Memorandum of Association Services.

The Memorandum of Association (MOA) is a legal document that defines the company's constitution, including its name, registered office address, objects, authorized capital, and liability of members. It serves as the company's charter and provides fundamental details about its operations.

A company may need to alter its MOA for various reasons, such as changing its name, modifying its objects or business activities, shifting its registered office to another state, increasing or decreasing its authorized capital, or altering the liability clause of its members.

To alter the name clause in the MOA, the company needs to pass a special resolution at a shareholders' meeting. If it's a public or private limited company, no government consent is required. However, for other types of companies, the central government's approval may be necessary.

To change the registered office from one state to another, the company must pass a special resolution, obtain approval from the Company Law Board, and file the altered MOA with the Registrar of Companies (ROC) in both the old and new states.

To modify the objects clause, a private limited company can do so relatively easily, while a public company that has raised money from the public must pass a special resolution. The resolution must be published in newspapers and on the company's website, and dissenting shareholders must be given an opportunity to exit.

The process for altering the MOA typically involves convening a board meeting, issuing a notice for a general meeting, holding the general meeting and passing a special resolution, and filing the altered MOA with the ROC within 30 days.

Yes, a company can alter its liability clause by passing a special resolution. However, the liability of shareholders cannot be made unlimited. A copy of the resolution must be filed with the ROC within 30 days.

The capital clause can be altered by passing an ordinary resolution in a general meeting. The alteration may involve subdivision, consolidation, or conversion of shares or annulment of unsubscribed capital. The altered MOA must be submitted to the ROC within 30 days.

A company may need to increase its authorized capital if it plans to issue additional shares, as the issue cannot exceed the authorized capital. In such cases, the company must alter its MOA to reflect the increased authorized capital.

Altering the MOA is a crucial step for a company as it involves modifying its fundamental constitution and operations. It is a complex and extensive procedure that must be carried out with due professional care to ensure compliance with legal requirements and protect the interests of the company and its stakeholders.