The Memorandum of Association (MOA) and Articles of Association (AOA) are two important documents that govern a company’s internal and external affairs in India. Both can be altered, but the procedure and scope of alteration are different.
Alteration of Memorandum of Association (MOA)
The MOA outlines the company’s objectives and scope of activities. To alter the MOA, a company must adhere to the following steps:
Resolution: The alteration must be approved by passing a special resolution during a general meeting of the company’s members.
Approval from Central Government: In some cases, when an alteration affects the company’s capital clause or objects clause, the approval of the Central Government may be required. This typically involves filing an application with the Regional Director.
Registrar of Companies (RoC) Approval: After receiving member approval and, if necessary, Central Government approval, the company must file the altered MOA with the RoC within 30 days. The RoC will review the documents and, upon satisfaction, will issue a Certificate of Incorporation with the changes.
Notice to Creditors and Others: In case the alteration affects the rights of creditors or debenture holders, a notice must be published in newspapers and given to creditors or debenture holders to protect their interests.
Alteration of Articles of Association (AOA)
The AOA contains rules and regulations for the internal management of the company. Altering the AOA involves the following steps:
Resolution: Similar to the MOA, the AOA can be altered by passing a special resolution during a general meeting of the company’s members.
Filing with RoC: After member approval, the company must file the altered AOA with the RoC within 30 days. There is no requirement for Central Government approval for AOA alterations.
Effective Date: The altered AOA becomes effective from the date of RoC’s approval.
Consistency with MOA: The altered AOA must remain consistent with the MOA. If there’s any inconsistency between the MOA and AOA, the MOA prevails.
Publication: Unlike the MOA, there is typically no requirement to publish alterations to the AOA in newspapers or notify creditors or debenture holders.
Restrictions on Alteration:
- The alteration of MOA or AOA must not be inconsistent with the Companies Act, 2013, and other applicable laws.
- It should not result in a breach of any contract entered into by the company.
