Memorandum of Association

Section 13 of Companies Act 2013 regulates the process

of amendment in Memorandum of Association is
applicable to all companies.
All clauses of Memorandum except Capital clause can
be altered by following the provisions of Section 13 of
Companies Act, 2013 by passing special resolution.

Alteration Of Memorandum
1. Change In Name:
(i) Alteration by a special resolution
With the prior approval of the central government
(ii) Change if name is identical :
By ordinary resolution, within 3 months of directions in case the
name is too identical and 6 months if identical to existing
trademark.
(iii) Intimate the new name within 15 days to the Registrar.
(iv) Default: In case of failure to comply, a fine of Rs 1000 per day to
company and Rs 5000-100000 to every officer

Issue of fresh Certificate of Incorporation

http://www.caclubindia.com/forum/procedure-for-change-in-object-clause-of-the-company-300394.asp#.VNRlxi58srU

2 . Change In Registered Office:

(i) From the Jurisdiction of one ROC to the other within
state
Confirmation by the regional director
Confirmation communicated within 30 days by
regional director.
Confirmation filed with the registrar within 60 days
along with altered MOA
The registrar registers it within 30 days

Example: RoCs within one state

MAHARASHTRA
A) Mumbai
Dr. T. Pandian (ROC Mumbai)
100, Everest,
Marine Drive
Mumbai- 400002.
Phone: 02222812627/22020295/22846954
Fax: 022-22811977

B) Pune
Sh. Vijay Kumar Khubchandani
(ROC Pune)
Registrar Of Companies
PMT Building ,
Pune Stock Exchange,
3rd Floor, Deccan Gymkhana,
Pune-411004
Phone: 020-25521376
Fax: 020-25530042

(ii) Change from one state to the other state

Special Resolution @ general meeting
Confirmation from the Central Govt. (will inform in 60 days)
http://taxguru.in/company-law/procedure-change-registered-office-companies-act-2013.html

Consent of the affected parties (like creditors)

Certified copy of the order to be filed with the registrar of each
state
Altered MOA registered within 30 days
Registrar shall register within 30 days from filing of such
documents
(iii) Effect of Failure to Register
In case of failure to comply with the provisions, the alteration
becomes void and inoperative

3. Alteration of Objects:
The alteration of objects is subject to
(i) Substantive Limits
(ii) Procedural Limits

(i)

Substantive limit:

A special resolution is passed to enable the company to

a) Carry business more economically and efficiently
b) To attain purpose by new and improved means
c) To enlarge local area of operations
d) To carry on some business which may conveniently or advantageously be
combined with the business of the company.

The Object clause of MOA permitted the company to manufacture yarn and cloth
but actually it was carrying on manufacture of artificial silk cloth from yarn
purchased in the market . The shareholder passed a special resolution to add
the production of fuel in the object clause so that company can have the power
to produce acetate yarn itself for the manufacture of silk. Is the act valid ?

A company which was formally forbidden by its AOA from

paying remuneration to its Manager. Therefore the company
altered its objective clause so that Company can have
power to pay this remuneration to carry on the business in
more efficient way . Is the alteration Valid ?
A company was formed to acquire land in Egypt, wanted to
alter its memorandum to take power to acquire land in
Sudan. The company altered its objective clause so that
Company can have power to purchase land in Sudan . Is
the alteration Valid ?

Procedure of alteration of Object Clause

Step 1 : Call BOD Meeting

a)Take approval of Directors for change in object clause
of Memorandum
b)Fix date, time and place for holding Extra-ordinary
General meeting (EGM) to get approval of shareholders,
by way of Special Resolution, for amendment in object
clause of Memorandum.
c)To approve notice of EGM along with Agenda
d)To authorise the Director or Company Secretary to issue
Notice of the Extra-ordinary General meeting (EGM)

Step 2 - Issue Notice of the Extra-ordinary General

meeting (EGM) to all Members, Directors and the Auditors
of the company

Step 3 Holding of EGM

Step 4 - Filling with ROC

Company is required to file Special Resolution passed by
shareholders for alteration of Memorandum with
concerned Registrar of Companies. Hence, file form MGT14 within 30 days of passing of Special Resolution with the
concerned Registrar of Companies, with prescribed fees
and along with following attachments:

a)Notice of EGM;
b)Altered Memorandum of Association;
c) Certified True copy of Board Resolution
may be attached as an optional attachment.

4. Change in Liability Clause:

The Liability clause cannot be changed to add to the
liability unless all members agree in writing to such
change

Change in Capital Clause:

For Increase in Authorise Share Capital, the company has to make sure
that its Articles of Association contain a provision authorising it to
increase its authorized share capital.
Section 61 of the Companies Act, 2013, mandates that Company has to
make sure that its Articles of Association contain a provision authorising it to
increase its authorised share capital.
If there is no such provision then the company has to take steps for
alteration of its Articles of Association in accordance with the provision of
Section 14 of the Companies Act, 2013, to insert the clause enabling
increase in the Authorised share capital of the Company.

 Procedure of alteration of Capital Clause

Step 1 : Call BOD Meeting

Take approval of Directors for change in object clause of
Memorandum
Fix date, time and place for holding Extra-ordinary General
meeting (EGM) to get approval of shareholders, by way of
Ordinary Resolution, for amendment in object clause of
Memorandum.
To approve notice of EGM along with Agenda
To authorize the Director or Company Secretary to issue Notice of
the Extra-ordinary General meeting (EGM)
Step 2 - Issue Notice of the Extra-ordinary General meeting
(EGM) to all Members, Directors and the Auditors of the company

 Step 3 Holding of EGM

Step 4 - Filling with ROC
Company is required to file Ordinary Resolution passed by shareholders for
alteration of Memorandum with concerned Registrar of Companies . Hence, file
form SH-7 within 30 days of passing of Ordinary Resolution with the concerned
Registrar of Companies, with prescribed fees and along with following attachments:
Notice of EGM; Certified True copy of Special Resolution;
Altered Memorandum of Association;
Certified True copy of Board Resolution may be attached as an optional
attachment.

Step 5 . Notice to be given to Registrar for alteration of share capital.

where a company alters its share capital , the company shall file a notice with the
Registrar within a period of thirty days of such increase along with a copy of
altered Memorandum.

DOCTRINE OF ULTRA VIRES

ULTRA means beyond and VIRES means power'.
The term ultra vires means doing of the act is beyond the
legal power and authority of the company i.e. which is
not authorized by the object clause in the memorandum.
It cant be rectified by the whole body of shareholders.

 Ultra vires the Directors :- If an act or transaction

is ultra vires the directors (i.e. beyond their
powers, but within the powers of the company),
shareholders can ratify it by a resolution in a
general meeting.
If any act is ultra vires the articles, it can be
rectified by a special resolution at a general
meeting.

Ashbury Railway Carriage & Iron Co. Ltd. vs.

Riche (1875)
A company was incorporated with the following objects :
(i) to make, sell or lend on hire railway carriages &
wagons;
(ii) to carry on the business of mechanical engineers
& general contractors;
(iii) to purchase, lease, work & sell mines, minerals,
land & buildings.

The company entered into a contract with Riche for the financing of
the construction of a railway line in Belgium. It was ratified by
majority of the members.
The company repudiated the contract. The other party brought an
action for the breach of contract on the point below.
The contract came well with in the meaning of the words general
contractors and it was ratified by all majority of shareholders.
The Court held that the contract was ultra vires the company & void.

Effect of Ultra vires transaction

Ultra vires contracts- third party cant say that they have
not read the MOA.
Ultra virus borrowings- lender can not recover the
money.
Ultra vires acquired property will be protected by
company against the damage by other persons and
company has a right to hold that property

A telephone company put up the wires in a certain area . The

company had no power to put up the wire in that area . One
mischievous person cut them down . Can Company clam for
damages ?
The main object of company was prevention of cruelty to
animals . It gave Rs 80000/- to political party which promised
the abolition of hunting . Out of Rs 80000/- , Rs 50000 /- were
given as gift and Rs 30000/- were given for publicizing of
manifesto containing commitment of animal welfare . Is the
act of company valid ?