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Changes in Councilor’s Articles

Changes in Councilor’s Articles


(Alteration in Articles of Association) The Articles of Association can be changed by passing a special resolution under the provisions of the Companies Act and the terms of the Councilor Memorandum. Any changes made to the Articles of Association shall be deemed to be valid. If a public company changes its articles in such a way that it becomes a private company in place of a public company, the concurrence of the Central Government must be obtained for such change and a copy thereof should be sent to the Registrar within one month. Changes in Articles should not be against the Companies Act and Councilor’s Memorandum of Understanding. Certain restrictions have been imposed on the changes in the Articles of the Company which are based on the decisions of the judges. These restrictions are as follows


(I) Statutory Restrictions


While making changes in the Articles, the following statutory restrictions should be kept in mind: (1) Every change made in the Articles under the Companies Act should be subject to the provisions of the Companies Act. Also, no change should be such as to permit the doing of any act prohibited by the Companies Act.


Changes under the Articles should be subject to the Councilor’s memorandum and should not violate the Articles and Conditions. Changes with the Articles should not violate the objectives and limits of the area of ​​work given in the Councilor’s memorandum.


(3) Special resolution – It is necessary to pass a resolution for every kind of change to be made. A special resolution has to be passed to rectify the minor errors existing in the Articles.


(4) In the articles of converting into a private company, so


change of


whereby the conversion of a public company into a private company is effected upon obtaining the consent of the Central Government.


if it falls


(5) Written consent to increase liability – If any such change in the Articles increases the liability of the members, then the change can be effected on obtaining the consent of the members and unlimited liability of the company on re-registration as a company.


(6) Change of Directors Central Government Consent- If there is a change in the public company in relation to the appointment or appointment of Managing Director, Director, or in relation to increasing the remuneration of one, it will be necessary to obtain the consent of the Central Government.


(7) Changes in accordance with the order of the Tribunal – The Tribunal can order the company to change its Articles to prevent the mismanagement in the company. The company has to amend its Articles in accordance with the orders or directions of the Tribunal.


(8) Registration of Articles – Every change made in the Articles of Association shall be effective only


when it has been registered by the Registrar. Therefore, it is necessary to register the Articles of Association to make the change effective. (II) Judicial Restrictions


The following are included in the provisions of the Articles of Association of the Company:




(1) Change not to be unlawful There should be no change in the Articles of Association of the company which is not statutory under the Act.


(2) Changes to be beneficial to the company – Changes in the Articles of Association of the company should be made in good faith and beneficial to the company. If it is done for personal gain, it will be completely useless.


(3) Justified alteration – The article cannot be changed which is not just.


If the proposal for purchase of shares of minority shareholders of majority shareholders


If you do, it will not be considered just. (4) Contract with third party not to be breached – The Articles of Association of the company should not be changed in such a way as to give that company the right to enter into a contract with the third party. If a change in the Articles has happened to any party, the company shall be bound to indemnify that person.


(5) Change should not be the removal of any member – The change in the Articles should be such that the Board of Directors of the company shall have the right to remove or remove any member. if any such change

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