Alteration of Memorandum of Association

Alteration of memorandum of association involves compliance with prescribed procedure. y Alterations only to the extent necessary for simple and fair working of the company would be permitted. y Alterations should not be prejudicial to the members or creditors of the company and should not have the effect of increasing the liability of the members and the creditors.
y

Contents of the memorandum of association can be altered as under

Change of name: y Change in the registered office of the company
y

ARTICLES OF ASSOCIATION
y

Definition Article means the articles of association of a company as originally framed or as altered from time to time in pursuance of any previous companies laws or of this Act
y

Sec.2 (2)

CONTENTS OF ARTICLES
1. 2. 3. 4. 5. 6.

The extent to which Table A is applicable Different classes of shares and their rights Procedure of making an issue of share capital and allotment thereof Procedure of issuing share certificates and share warrants Forfeiture of shares and the procedure of their re-issue Procedure for transfer and transmission of shares

CONTENTS OF ARTICLES
7. 8. 9. 10. 11. 12.

The time lag in between calls on shares conversion of shares into stock Directors, their appointment, remuneration, qualifications, etc. Account and audit Lien of shares Payment of commission on shares and debentures to underwriters Rules for adoption for preliminary contracts if any

CONTENTS OF ARTICLES
13.

14.

15. 16. 17. 18.

Re-organization and consolidation of shares capital Alteration of share capital & Buyback of shares Borrowing power of directors General meeting, proxies and polls Voting rights of members Winding up

ALTERATION OF ARTICLES (SEC 31)

Procedure : Alteration by passing a special resolution. Copy of resolution to be sent to registrar within 30 days. Copy of altered articles to be registered within 3 months of passing of resolution.

LIMITATIONS REGARDING ALTERATION OF ARTICLES

1.

2. 3. 4.

Alteration should not be inconsistent with a. Provisions of Company Act or any other statute b. Conditions contained in memorandum Approval of govt. to be obtained in certain cases Alteration must not deprive any person of his rights under a contract Alteration must not constitute a fraud on the minority

BINDING FORCE OF MEMORANDUM AND ARTICLES (SEC 36)

y

The following are the legal implications: Company is bound to its members Each member is bound to the company Each member is bound to other members in exceptional case only Neither the company nor the members are bound to outsiders

References
y

Walterc. M.woon. (1985). Company Law, longman Singapore Publisher Pte Ltd. Companies Act 1965 (Act 125)