{"id":13207,"date":"2020-09-22T15:52:57","date_gmt":"2020-09-22T10:22:57","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=13207"},"modified":"2023-03-17T18:27:16","modified_gmt":"2023-03-17T12:57:16","slug":"alteration-of-articles-of-association","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/","title":{"rendered":"Alteration of Articles of Association: An Analysis on AOA"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The term \u201c<strong><em>Alteration of Articles of Association<\/em><\/strong>\u201d\ndenotes a process of <strong><em>modifying or altering<\/em><\/strong> the <strong><em>by-laws<\/em><\/strong>,\n<strong><em>rules,\nand regulations<\/em><\/strong> that govern or regulate the <strong><em>Internal Management<\/em><\/strong> of a\ncompany.<\/p>\n\n\n\n<p>Further, the <strong><em>AOA or Articles of Association creates<\/em><\/strong>\na <strong><em>balance<\/em><\/strong>\nbetween the<strong><em> objectives and Mission <\/em><\/strong>of a company. <\/p>\n\n\n\n<p>In this blog, we will discuss the concept of <strong><em>Alteration\nof Articles of Association<\/em><\/strong> and its <strong><em>effect <\/em><\/strong>on the company.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3352f7a3439\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3352f7a3439\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Concept_of_Articles_of_Association\" title=\"Concept of Articles of Association\">Concept of Articles of Association<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Need_for_Alteration_of_Articles_of_Association\" title=\"Need for Alteration of Articles of Association \">Need for Alteration of Articles of Association <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Features_of_AOA\" title=\"Features of AOA\">Features of AOA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Different_Forms_of_Articles_of_Association\" title=\"Different Forms of Articles of Association\">Different Forms of Articles of Association<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Contents_of_an_Articles_of_Association\" title=\"Contents of an Articles of Association\">Contents of an Articles of Association<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Share_Capital_and_Variation_in_Rights\" title=\"Share Capital and Variation in Rights\">Share Capital and Variation in Rights<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Lien_on_Shares\" title=\"Lien on Shares\">Lien on Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Calls_on_Shares\" title=\"Calls on Shares\">Calls on Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Transfer_of_Shares\" title=\"Transfer of Shares \">Transfer of Shares <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Transmission_of_shares\" title=\"Transmission of shares\">Transmission of shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Forfeiture_of_Shares\" title=\"Forfeiture of Shares\">Forfeiture of Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Alteration_of_Capital\" title=\"Alteration of Capital\">Alteration of Capital<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Conversion_of_Shares_into_Stock\" title=\"Conversion of Shares into Stock\">Conversion of Shares into Stock<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Capitalisation_of_Profits\" title=\"Capitalisation of Profits\">Capitalisation of Profits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Buyback_of_Shares\" title=\"Buyback of Shares\">Buyback of Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#General_Meetings_and_Proceedings\" title=\"General Meetings and Proceedings\">General Meetings and Proceedings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Voting_rights_and_Proxy\" title=\"Voting rights and Proxy\">Voting rights and Proxy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Board_of_Directors_Board_Meetings_and_Proceedings\" title=\"Board of Directors, Board Meetings, and Proceedings\">Board of Directors, Board Meetings, and Proceedings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Key_Managerial_Personnel_KMP\" title=\"Key Managerial Personnel (KMP)\">Key Managerial Personnel (KMP)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Dividends_and_Reserves\" title=\"Dividends and Reserves\">Dividends and Reserves<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Accounts_and_Audits\" title=\"Accounts and Audits\">Accounts and Audits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Borrowing_Powers\" title=\"Borrowing Powers\">Borrowing Powers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Winding_Up_of_the_Company\" title=\"Winding Up of the Company\">Winding Up of the Company<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Is_it_Mandatory_to_Sign_the_Articles_of_Association\" title=\"Is it Mandatory to Sign the Articles of\nAssociation?\">Is it Mandatory to Sign the Articles of\nAssociation?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Procedure_for_the_Alteration_of_Articles_of_Association\" title=\"Procedure for the Alteration of Articles\nof Association\">Procedure for the Alteration of Articles\nof Association<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Convene_a_Board_Meeting_Section_173_and_SS-1\" title=\"Convene a Board Meeting (Section 173 and SS-1)\">Convene a Board Meeting (Section 173 and SS-1)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Notice_for_General_Meeting_Section_101\" title=\"Notice for General Meeting (Section 101)\">Notice for General Meeting (Section 101)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Convene_a_General_Meeting_Section_101\" title=\"Convene a General Meeting (Section 101)\">Convene a General Meeting (Section 101)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#File_Form_MGT-14\" title=\"File Form MGT-14\">File Form MGT-14<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Key_Points_for_the_Alteration_of_Articles_of_Association\" title=\"Key Points for the Alteration of Articles of Association\">Key Points for the Alteration of Articles of Association<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Effects_of_the_Alteration_of_AOA\" title=\"Effects of the Alteration of AOA\">Effects of the Alteration of AOA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-articles-of-association\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_Articles_of_Association\"><\/span>Concept of Articles of Association<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The term <strong><em><a href=\"https:\/\/swaritadvisors.com\/learning\/articles-of-association-aoa-and-its-importance\/\">Articles of Association<\/a><\/em><\/strong> or <strong><em>AOA<\/em><\/strong> is <strong><em>parallel<\/em><\/strong> to a <strong><em>Rule Book<\/em><\/strong> within a Company. This Legal Document includes all the <strong><em>details and information<\/em><\/strong> that are significant to <strong><em>govern and regulate<\/em><\/strong> the <strong><em>Internal Management<\/em><\/strong> of the company.<\/p>\n\n\n\n<p><strong>Further, the details included under the AOA are as follows:<\/strong><\/p>\n\n\n\n<ol><li>Shares;<\/li><li>Details\nregarding the manner of holding different meetings;<\/li><li>Role and Powers\nof the Directors;<\/li><\/ol>\n\n\n\n<p>Moreover, the definition of \u201c<strong><em>Articles of Association<\/em><\/strong>\u201d\nis provided under <strong><em>section 2(5)<\/em><\/strong> of the <strong><em>Companies Act 2013<\/em><\/strong>. As per this\ndefinition, an AOA comprises of all the <strong><em>rules<\/em><\/strong>, <strong><em>regulations<\/em><\/strong>, <strong><em>details<\/em><\/strong>,\nand <strong><em>particulars<\/em><\/strong>\nthat govern the policies of a company. <\/p>\n\n\n\n<p>Also, every company, whether it is a <strong><em>Private Limited Company<\/em><\/strong>, <strong><em>One Person Company<\/em><\/strong>, or a <strong><em>Public Limited Company<\/em><\/strong> must have a duly drafted <strong><em>AOA<\/em><\/strong> (Articles of Association) and <strong><em>MOA <\/em><\/strong>(<strong>Memorandum of Association<\/strong>) for them. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Need_for_Alteration_of_Articles_of_Association\"><\/span>Need for Alteration of Articles of Association <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Need-for-Alteration-OF-ARTICLES-OF-ASSOCIATION.png\" alt=\"need of Alteration of Articles of Association\" class=\"wp-image-13210\" width=\"443\" height=\"443\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Need-for-Alteration-OF-ARTICLES-OF-ASSOCIATION.png 1000w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Need-for-Alteration-OF-ARTICLES-OF-ASSOCIATION-150x150.png 150w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Need-for-Alteration-OF-ARTICLES-OF-ASSOCIATION-300x300.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Need-for-Alteration-OF-ARTICLES-OF-ASSOCIATION-768x768.png 768w\" sizes=\"(max-width: 443px) 100vw, 443px\" \/><\/figure><\/div>\n\n\n\n<p>The <strong><em>Reasons<\/em><\/strong> for the <strong><em>Alteration of Articles of\nAssociation<\/em><\/strong> are as follows:<\/p>\n\n\n\n<ol><li>Conversion of a\nPrivate Limited to Public Limited Company;<\/li><li>Conversion of a Public\nLimited to a Private Limited Company;<\/li><li>Change in\nCompany Name;<\/li><li>Any other\nAmendment made;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Features_of_AOA\"><\/span>Features of AOA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/FEATURES-OF-AOA-1024x569.png\" alt=\"Features of AOA\" class=\"wp-image-13209\" width=\"524\" height=\"291\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/FEATURES-OF-AOA-1024x569.png 1024w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/FEATURES-OF-AOA-300x167.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/FEATURES-OF-AOA-768x427.png 768w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/FEATURES-OF-AOA.png 1028w\" sizes=\"(max-width: 524px) 100vw, 524px\" \/><\/figure><\/div>\n\n\n\n<p>The <strong><em>features of an AOA<\/em><\/strong> are as follows:<\/p>\n\n\n\n<ol><li>It is a Part of\nthe Company\u2019s Constitution;<\/li><li>It acts as a\nContract among the Members of the Company;<\/li><li>Lays down the\nDuties and Responsibilities of the Shareholders;<\/li><li>Includes\nStatutory Clauses for a Company;<\/li><li>Provides By-laws\nand Regulations for the Company;<\/li><li>Acts as a\nCharter for the Company;<\/li><li>It is a Public\nDocument;<\/li><li>Anyone can\nInspect an AOA;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Different_Forms_of_Articles_of_Association\"><\/span>Different Forms of Articles of Association<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/different-forms-of-articles-of-association.png\" alt=\"Forms of Articles of Association\" class=\"wp-image-13211\" width=\"398\" height=\"398\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/different-forms-of-articles-of-association.png 1000w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/different-forms-of-articles-of-association-150x150.png 150w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/different-forms-of-articles-of-association-300x300.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/different-forms-of-articles-of-association-768x768.png 768w\" sizes=\"(max-width: 398px) 100vw, 398px\" \/><\/figure><\/div>\n\n\n\n<p>The <strong><em>different forms <\/em><\/strong>of <strong><em>Articles\nof Association<\/em><\/strong> are as follows:<\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td><strong>Table<\/strong>   <\/td><td><strong>Form of AOA<\/strong>   <\/td><\/tr><tr><td>Table F   <\/td><td>Articles of Association of a Company Limited by Shares;   <\/td><\/tr><tr><td>Table G   <\/td><td>Articles of Association of a Company Limited by Guarantee and is having Share Capital;   <\/td><\/tr><tr><td>Table H   <\/td><td>Articles of Association of a Company Limited by Guarantee but not having Share Capital;      <\/td><\/tr><tr><td>Table   I   <\/td><td>Articles of Association of an Unlimited Company which is having a Share Capital;    <\/td><\/tr><tr><td>Table   J   <\/td><td>Articles of Association of an Unlimited Company which is not having a Share Capital;    <\/td><\/tr><\/tbody><\/table>\n\n\n\n<p>Depending on the <strong><em>basis\nof the applicability<\/em><\/strong>, a company needs to adopt all or any of the rules\nand regulations contained in the Articles Model. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Contents_of_an_Articles_of_Association\"><\/span>Contents of an Articles of Association<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"1000\" height=\"1000\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Untitled-1.png\" alt=\"Contents of an Articles of Association\" class=\"wp-image-13212\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Untitled-1.png 1000w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Untitled-1-150x150.png 150w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Untitled-1-300x300.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Untitled-1-768x768.png 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><\/figure><\/div>\n\n\n\n<p>The <strong><em>contents of the Articles of Associatio<\/em><\/strong>n\nor AOA of a company are as follows:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Share_Capital_and_Variation_in_Rights\"><\/span>Share Capital and Variation in Rights<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>This clause of the AOA or Articles of Association includes the following:<\/strong><\/p>\n\n\n\n<ol><li>Sub-division\nof Shares;<\/li><li>Rights\nof Shareholders;<\/li><li>Relationship\nof Rights given;<\/li><li>Share\nCertificates;<\/li><li>Payment\nof Commission;<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Lien_on_Shares\"><\/span>Lien on Shares<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This clause mainly states the\nprovisions regarding the retaining and holding of the possession of shares if\nin case a member or shareholder of a company is unable to pay off his\/her debt back.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calls_on_Shares\"><\/span>Calls on Shares<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>All the details regarding the\nwhole or partly unpaid amount on each share held by the shareholder are\nincluded under this section. In this case, the shareholders need to pay the\ncall money when demanded by the company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Transfer_of_Shares\"><\/span>Transfer of Shares <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It includes the procedure to\ntransfer the shares held by the shareholder (transferor) to any other person\n(transferee).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Transmission_of_shares\"><\/span><strong>Transmission of shares<\/strong><strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>&nbsp;All the details concerning the following are included under this section:<\/strong><\/p>\n\n\n\n<ol><li>Title\nDevolution by Succession;<\/li><li>Death;\n<\/li><li>Marriage;\n<\/li><li>Insolvency,\netc.<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Forfeiture_of_Shares\"><\/span><strong>Forfeiture of Shares<\/strong><strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This section deals with the provision of Forfeiture of shares held by the shareholders. The term \u201c<strong>Forfeiture<\/strong>\u201d denotes a situation wherein the shareholder of a company is not able or fails to pay the call money demanded on the shares.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Alteration_of_Capital\"><\/span><strong>Alteration of Capital<\/strong><strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The term \u201c<strong>Alteration of Capital<\/strong>\u201d denotes the Decrease, Increase, or Reclassification of Capital as provided by the Articles of Association. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conversion_of_Shares_into_Stock\"><\/span>Conversion of Shares into Stock<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In consonance with the Articles\nof Association, a company can easily convert its shares into stock; it just\nneeds to pass an ordinary resolution in a general meeting.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Capitalisation_of_Profits\"><\/span>Capitalisation of Profits<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>The term \u201cCapitalisation of Profits\u201d denotes the use of the Retained\nEarnings of a company to pay a bonus to the shareholders in the form of\nadditional stock or dividends.<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Buyback_of_Shares\"><\/span>Buyback of Shares<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As per the provisions of the <strong>Articles of Association<\/strong>, a company has a right to buyback its shares from the shareholders. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"General_Meetings_and_Proceedings\"><\/span><strong>General Meetings and Proceedings<\/strong><strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>All the provisions and\nregulations relating to the General Meetings (GM) and the manner in which the\nmeetings should be conducted are contained in the AOA or Articles of\nAssociation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Voting_rights_and_Proxy\"><\/span><strong>Voting rights and Proxy<\/strong><strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>All the members of a company or their\nappointed Proxies have a right to cast a vote on certain matters. The manner in\nwhich a member or his\/her proxy can cast a vote is provided under the\nprovisions of the Articles of Association.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Board_of_Directors_Board_Meetings_and_Proceedings\"><\/span><strong>Board of Directors, Board Meetings, and Proceedings<\/strong><strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>All the provisions regarding the\nfollowing are provided under the provisions of Articles of Association: <\/p>\n\n\n\n<ol><li>Appointment\nof Directors;<\/li><li>Remuneration\nof Directors; <\/li><li>Qualification\nof Directors, <\/li><li>Powers\nof Directors;<\/li><li>Proceedings of the Board of Directors (BOD) Meetings;<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Managerial_Personnel_KMP\"><\/span><strong>Key Managerial Personnel (KMP)<\/strong><strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This section of the Articles of\nAssociation provides deals with the Appointment, Remuneration, Duties, and Powers\nof CEO (Chief Executive Officer), CS (Company Secretary), CFO (Chief Financial\nOfficer), or Manager.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Dividends_and_Reserves\"><\/span><strong>Dividends and Reserves<\/strong><strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>All the details regarding the\ndistribution of Dividends to Shareholders are provided under this section of\nthe Articles of Association.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Accounts_and_Audits\"><\/span><strong>Accounts and Audits<\/strong><strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Manner in which the company\nneeds to maintain its books of accounts and records are provided under this\nsection of AOA.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Borrowing_Powers\"><\/span><strong>Borrowing Powers<\/strong><strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Every company has the power to\nborrow funds from lending institutions or from any other source. However, the\nsame must be in accordance with the provisions of the Articles of Association\nof the company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Winding_Up_of_the_Company\"><\/span><strong>Winding Up of the Company<\/strong><strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>All the provisions, rules, and\nregulations relating to the winding up of the company, together with the manner\nof dissolving the company, are provided under this part of an AOA.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_it_Mandatory_to_Sign_the_Articles_of_Association\"><\/span>Is it Mandatory to Sign the Articles of\nAssociation?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>All the subscribers of an AOA need to sign it compulsorily with their DSC (<strong>Digital Signature Certificate<\/strong>). The subscribers also require to provide some details as follows in the presence of at least 1 witness:<\/p>\n\n\n\n<ol><li>Name;<\/li><li>Address;<\/li><li>Occupation;<\/li><\/ol>\n\n\n\n<p>Further, it shall be relevant to\nnote that all witnesses present must attest signature with their own details\nand signature.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_for_the_Alteration_of_Articles_of_Association\"><\/span>Procedure for the Alteration of Articles\nof Association<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Procedure-for-the-alteration-of-articles-of-assoiciation.png\" alt=\"Procedure for the Alteration of Articles of Association\" class=\"wp-image-13213\" width=\"466\" height=\"466\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Procedure-for-the-alteration-of-articles-of-assoiciation.png 1000w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Procedure-for-the-alteration-of-articles-of-assoiciation-150x150.png 150w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Procedure-for-the-alteration-of-articles-of-assoiciation-300x300.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/09\/Procedure-for-the-alteration-of-articles-of-assoiciation-768x768.png 768w\" sizes=\"(max-width: 466px) 100vw, 466px\" \/><\/figure><\/div>\n\n\n\n<p><strong>The steps involved in the process of Alteration of Articles of Association are as follows:<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Convene_a_Board_Meeting_Section_173_and_SS-1\"><\/span>Convene a Board Meeting (Section 173 and SS-1)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In the first step, there is a need to convene a\nBoard Meeting to approve or pass a resolution for the process of Alteration of\nArticles of Association. For the meeting, the company must send notice to its\ndirector at least 7 days before the date of the meeting.<\/p>\n\n\n\n<p><strong>Further, the agenda of the meeting will be as follows:<\/strong><\/p>\n\n\n\n<ol><li>To Fix a Time, Venue, and Date for Holding a GM (General Meeting) of the company to pass a Special Resolution;<\/li><li>To Approve the Notice and Agenda of the Meeting;<\/li><li>As per <strong>section 102 of the Companies Act 2013<\/strong><a href=\"https:\/\/en.wikipedia.org\/wiki\/Companies_Act_2013\">[1]<\/a> , the notice of a general meeting must have an explanatory as its attachment;<\/li><li>To Authorise a CS (Company Secretary) or any other officer of the respective company to issue a notice of the meeting as approved by the Board; <\/li><\/ol>\n\n\n\n<p>However, in the case of a Listed Company, the\nparticulars and details of the AOA of a company are sent to the Recognized\nStock Exchange on the conclusion of the Board Meeting.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Notice_for_General_Meeting_Section_101\"><\/span>Notice for General Meeting (Section 101)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Now, in the next step, the company needs to send a Notice of\nEGM&nbsp;(Extraordinary General Meeting) at least 21 days before the date of\nactual EGM. <\/p>\n\n\n\n<p>Further, it shall be relevant to note that an EGM can be\ncalled on a Shorter Notice as well; the company just needs the approval of\nmajority shareholders for the same. <\/p>\n\n\n\n<p>Moreover, the notice of an EGM or Extraordinary General\nMeeting will be sent to the individuals as follows:<\/p>\n\n\n\n<ol><li>Directors;<\/li><li>Members or\nShareholders;<\/li><li>Auditors\nof the Company;<\/li><\/ol>\n\n\n\n<p>Also, the notice of the meeting shall specify the time, date, venue, and shall have an explanatory statement as an attachment. The term \u201c<strong>Explanatory Statement<\/strong>\u201d denotes the business or agenda to be transacted at the meeting.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Convene_a_General_Meeting_Section_101\"><\/span>Convene a General Meeting (Section 101)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Another step in the process of Alteration of\nArticles of Association is to pass a Special Resolution for the same.<\/p>\n\n\n\n<p>However, in the case of a Listed Company, the directors need to forward a copy of the proceedings of the GM (<strong>General Meeting<\/strong>) to the concerned recognised stock exchange according to the provisions of the <strong><em>SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015<\/em><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"File_Form_MGT-14\"><\/span>File Form MGT-14<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In the last step of the <strong><em>procedure<\/em><\/strong> for the Alteration of Articles of Association, the directors of the company need to file a copy of the Special Resolution passed in <strong><a href=\"https:\/\/swaritadvisors.com\/learning\/form-mgt-14\/\">Form MGT 14<\/a><\/strong> with the Registrar of Companies, Indi, within 15 days of passing such resolution.<\/p>\n\n\n\n<p><strong>Further, the documents to be annexed with the MCA Form MGT-14 are as follows:<\/strong><\/p>\n\n\n\n<ol><li>Certified Copies\nof the Special Resolution;<\/li><li>Explanatory\nStatement;<\/li><li>Copy of the\nNotice of Meeting sent to Members; and<\/li><li>A Printed Copy\nof the Altered AOA;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Points_for_the_Alteration_of_Articles_of_Association\"><\/span>Key Points for the Alteration of Articles of Association<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>The points to be considered for the alteration of Articles of Association are as follows:<\/strong><\/p>\n\n\n\n<ol><li>Any\nKind of Alteration done must be notified in every copy of the Articles. These\ncopies are sent to the members on a request within 7 days;<\/li><li>In\ncase a company makes any default in complying with the regulations and\nprovisions of alteration of articles of association, then every officer of the\ncompany in default will be liable to pay Rs 1000 for each passing day to up to\nRs 1 lakh as the case may be;<\/li><li>Alteration\nof Articles of Association must not be done for the sake of doing illegal\nactivities or business;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Effects_of_the_Alteration_of_AOA\"><\/span>Effects of the Alteration of AOA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The <strong><em>effects<\/em><\/strong> of the <strong><em>alteration of articles of\nassociation <\/em><\/strong>are as follows:<\/p>\n\n\n\n<ol><li>Alteration of\nArticles of Association bound the member with the company;<\/li><li>Altered AOA will\ngovern the Internal Management, Business, and Administration of the Company<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Articles of a company acts as a\nrule book for the company. It not only defines the rights and duties of the\ndirectors but provides various means through which the shareholder can exercise\ncontrol over directors and the company as well.&nbsp;\n<\/p>\n\n\n\n<p>Further, the <strong><em>Alteration of Articles of Association<\/em><\/strong> denotes a process of <strong><em>modifying or altering<\/em><\/strong> the\n<strong><em>by-laws<\/em><\/strong>,\n<strong><em>rules,\nand regulations<\/em><\/strong> that govern or regulate the <strong><em>Internal Management<\/em><\/strong> of a\ncompany.<\/p>\n\n\n\n<p>In case of any confusion, reach out to <strong><em><a href=\"https:\/\/swaritadvisors.com\/\">Swarit Advisors<\/a><\/em><\/strong>, our experts will not only provide the clear and lucid learning of the concept but will guide you through the process of the alteration as well.<\/p>\n\n\n\n<p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/swaritadvisors.com\/learning\/alteration-of-moa-guide-to-alter-memorandum-of-association\/\">Alteration of MOA: Guide to Alter Memorandum of Association<\/a><\/mark>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The term \u201cAlteration of Articles of Association\u201d denotes a process of modifying or altering the by-laws, rules, and regulations that govern or regulate the Internal Management of a company. Further, the AOA or Articles of Association creates a balance between the objectives and Mission of a company. In this blog, we will discuss the concept [&hellip;]<\/p>\n","protected":false},"author":17,"featured_media":13208,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[675],"tags":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/13207"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=13207"}],"version-history":[{"count":10,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/13207\/revisions"}],"predecessor-version":[{"id":19068,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/13207\/revisions\/19068"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/13208"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=13207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=13207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=13207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}