Altering Article of Association of a Company – Companies Act 2013

Section 14(1) of the Companies Act, 2013 lays down that subject to the provisions of this Act and the conditions contained in its memorandum, if any, a company may, by a special resolution, alter its articles including alterations having the effect of conversion of -

(a) A Private Company into a Public Company; or

(b) A public company into a private company.

A Company may alter its Articles in accordance with the above provisions in any of the manners mentioned below:

a) By adoption of new set of articles;

b) By addition/insertion of a new Clause/s;

c) By deletion of a Clause/s ;

d) By amendment of a specific Clause/s ;

e) By substitution of a specific Clause/s .

Key Considerations:

Any change in the Articles of the company shall conform to the provisions of the Companies Act, 2013/1956, as applicable and the conditions contained in the Memorandum of Association of the company. (Section 14(1)

For effecting any change in the AOA resulting in the conversion of private company into a public company or vice-versa, company shall additionally follow the procedure prescribed for the conversion of private company into a public company or vice-versa.

By amendment, Company may insert provisions for entrenchment to the effect that specified provisions of the articles may be altered only if conditions or procedures as that are more restrictive than those applicable in the case of a special resolution, are met or complied with. (Section 5(3)

The provisions of entrenchment can be inserted only if agreed to by all the members of the company in the case of a private company and by a special resolution in the case of a public company. (Section 5(4)

The following procedure is to be followed for alteration of AOA under Section 14 of Companies Act, 2013