Companies Act 1956:- Alteration in Articles and Memorandum:

Alterations in name clause:

The name of a company may be changed. The may be changed when a company is changed from private to public company or public to private company.

When the change in name deals with addition or deletion of the Pvt., then the company has to pass a special resolution and intimation must be given to the ROC.

When the change in name deals with some other change special resolution is passed and company has to take approval of C. Govt. In this case the approval of the Central Govt may be taken prior to passing of resolution. Intimation must be given to the ROC regarding to the passing of resolution.

If the prior approval is taken then the resolution needs only be an ordinary resolution.

Alteration in Registered Office Clause:

When registered office is shifted within the city or state then a special resolution is to be passed and in this case intimation is to be given to the ROC.

When the registered office is to be shifted from one city to another city within the same state but the two cities have different ROC. Example;

In Maharashtra and tamil nadu there are two different ROCs’ in this case special resolution is passed and approval of the regional director and intimation is given to the ROC.

When the registered office is to be shifted from one state to another state a special procedure is fulfilled. In this procedure company has to pass a special resolution then it has to make an application to the National Company Law Tribunal (NCLT). The company will issue notices to its debenture holders, creditors and money lenders and these persons will give reply to the company, after getting  the replies the nclt will give the permission for shifting. If the debenture holders or  creditors do not agree to the shifting, then shifting cannot be done.

                Sometimes the state govt. make objections to the shifting on the ground that the govt will lose the revenue or govt will incur loss of employment of the public. In this case according to oddisa high court the arguments of govt can be accepted and permission is not given to the company for shifting , however according to Bombay high court and many other judgements of supreme court the permissions for shifting must be given because if there is a loss in one part of India then also there is a gain in some other part, because India is single country.

Alterations in object clause:

Any company may alter its object clause for some specific purpose hence object clause can be altered for following purposes.

• To carry on the business more economically
• To attain main objects of company
• To enlarge the area of operations
• To sell some business
• To merge with some business

                For alterations in object clause company has to pass special resolutions, it has to take the approval of C. Govt and intimation is given to ROC.

When objects are altered then there must not be any conflict between the objects.

Alterations in Capital Clause:

• The capital clause of a company can be altered by passing special resolution and giving intimation to ROC.
• The capital may be altered by increasing the shares or by reducing the shares or by combining the shares or by dividing the share into different parts.

Alteration in liability clause:

The liability clause of memorandum may be altered by passing a special resolution and giving the intimation to the ROC. In this case the alteration in memorandum is made by the company for any purpose.

Alteration of Association Clause:

The alterations in this clause can be made by passing a special resolution and giving the intimation to the ROC.

Note: In all the alterations intimation is given to ROC within 30 days of passing the special resolution.

Binding effect of Articles of Association and Memorandum of Association:

The Articles of Association and Memorandum of Association are binding between the companies and members.

The Articles of Association and Memorandum of Association bind the companies and members and also bind the members with the company.

The Articles of Association and Memorandum of Association are not binding between the company and outsiders.

(Example: Positive Securities Ltd Vs Eley)