Companies Act Section 13 — Alteration of memorandum
CHAPTER II INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO
Commercial / Corporate
Summary
Sub-section (1) states that, except as provided in section 61, a company may change the provisions of its memorandum by passing a special resolution and following the procedure laid out in this section.
Sub-section (2) says that any change to a company's name is subject to the rules in sub-sections (2) and (3) of section 4, and the change will not take effect unless the Central Government approves it in writing. However, this approval is not needed if the only change to the name is adding or removing the word "Private," which happens when a company converts from one class to another under this Act.
Sub-section (3) provides that when a company changes its name under sub-section (2), the Registrar will enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name. The name change is complete and effective only when this certificate is issued.
Sub-section (4) states that an alteration of the memorandum relating to moving the registered office from one State to another will not have any effect unless it is approved by the Central Government, based on an application made in the form and manner prescribed.
Sub-section (5) says the Central Government must dispose of the application under sub-section (4) within sixty days. Before passing its order, it may satisfy itself that the alteration has the consent of creditors, debenture-holders, and other persons concerned with the company, or that the company has made sufficient provision for the due discharge of all its debts and obligations, or that adequate security has been provided for such discharge.
Sub-section (6) provides that, except as provided in section 64, a company must file with the Registrar, in relation to any alteration of its memorandum, the special resolution passed under sub-section (1), and the approval of the Central Government under sub-section (2) if the alteration involves a change in the company's name.
Under clause (a) of sub-section (6), the company must file the special resolution passed by the company under sub-section (1).
Under clause (b) of sub-section (6), the company must file the approval of the Central Government under sub-section (2), if the alteration involves any change in the name of the company.
Sub-section (7) states that where an alteration of the memorandum results in the transfer of the registered office from one State to another, a certified copy of the order of the Central Government approving the alteration must be filed by the company with the Registrar of each of the States within the time and in the manner prescribed. The Registrars will register the same, and the Registrar of the State where the registered office is being shifted to will issue a fresh certificate of incorporation indicating the alteration.
Sub-section (8) says that a company which has raised money from the public through a prospectus and still has any unutilised amount out of that money shall not change its objects for which it raised the money through the prospectus unless a special resolution is passed by the company, and the conditions in clauses (i) and (ii) are met.
Under clause (i) of sub-section (8), the details, as may be prescribed, in respect of such resolution must be published in newspapers (one in English and one in vernacular language) which are in circulation at the place where the registered office of the company is situated, and must also be placed on the website of the company, if any, indicating therein the justification for such change.
Under clause (ii) of sub-section (8), the dissenting shareholders must be given an opportunity to exit by the promoters and shareholders having control, in accordance with regulations to be specified by the Securities and Exchange Board.
Sub-section (9) states that the Registrar shall register any alteration of the memorandum with respect to the objects of the company and certify the registration within a period of thirty days from the date of filing of the special resolution in accordance with clause (a) of sub-section (6).
Sub-section (10) provides that no alteration made under this section shall have any effect until it has been registered in accordance with the provisions of this section.
Sub-section (11) states that any alteration of the memorandum, in the case of a company limited by guarantee and not having a share capital, purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member, shall be void.
Official Text
(1) Save as provided in section 61, a company may, by a special resolution and after complying with the procedure specified in this section, alter the provisions of its memorandum.
(2) Any change in the name of a company shall be subject to the provisions of sub-sections
(2) and
(3) of section 4 and shall not have effect except with the approval of the Central Government in writing:
Provided that no such approval shall be necessary where the only change in the name of the company is the deletion therefrom, or addition thereto, of the word “Private”, consequent on the conversion of any one class of companies to another class in accordance with the provisions of this Act.
(3) When any change in the name of a company is made under sub-section (2), the Registrar shall enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name and the change in the name shall be complete and effective only on the issue of such a certificate.
(4) The alteration of the memorandum relating to the place of the registered office from one State to another shall not have any effect unless it is approved by the Central Government on an application in such form and manner as may be prescribed.
(5) The Central Government shall dispose of the application under sub-section (4) within a period of sixty days and before passing its order may satisfy itself that the alteration has the consent of the creditors, debenture-holders and other persons concerned with the company or that the sufficient provision has been made by the company either for the due discharge of all its debts and obligations or that adequate security has been provided for such discharge.
(6) Save as provided in section 64, a company shall, in relation to any alteration of its memorandum, file with the Registrar—
(a) the special resolution passed by the company under sub-section (1);
(b) the approval of the Central Government under sub-section (2), if the alteration involves any change in the name of the company.
(7) Where an alteration of the memorandum results in the transfer of the registered office of a company from one State to another, a certified copy of the order of the Central Government approving the alteration shall be filed by the company with the Registrar of each of the States within such time and in such manner as may be prescribed, who shall register the same, and the Registrar of the State where the registered office is being shifted to, shall issue a fresh certificate of incorporation indicating the alteration.
(8) A company, which has raised money from public through prospectus and still has any unutilised amount out of the money so raised, shall not change its objects for which it raised the money through prospectus unless a special resolution is passed by the company and—
(i) the details, as may be prescribed, in respect of such resolution shall also be published in the newspapers (one in English and one in vernacular language) which is in circulation at the place where the registered office of the company is situated and shall also be placed on the website of the company, if any, indicating therein the justification for such change;
(ii) the dissenting shareholders shall be given an opportunity to exit by the promoters and shareholders having control in accordance with regulations to be specified by the Securities and Exchange Board.
(9) The Registrar shall register any alteration of the memorandum with respect to the objects of the company and certify the registration within a period of thirty days from the date of filing of the special resolution in accordance with clause (a) of sub-section (6) of this section.
(10) No alteration made under this section shall have any effect until it has been registered in accordance with the provisions of this section.
(11) Any alteration of the memorandum, in the case of a company limited by guarantee and not having a share capital, purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member, shall be void.