Alteration of the AOA

The Articles of Association are a company’s internal rulebook, governing how it is run, its shares, board, meetings, and powers. Changing the articles requires a special resolution of the shareholders and the filing of Form MGT-14 within 30 days. Samkhya handles your AOA alteration quickly and correctly.

Alteration of the AOA: A Detailed Guide

The Articles of Association (AOA) set out the internal rules by which a company is managed, covering its shares and their transfer, the board and its powers, meetings, dividends, and borrowing. A company can alter its articles under Section 14 of the Companies Act, 2013 by passing a special resolution of the members, and the resolution is filed in Form MGT-14 within 30 days. Unlike some changes to the Memorandum, altering the articles generally needs no Central Government approval, the special resolution is enough, except where the change goes with a conversion between a private and a public company, which carries its own process. Companies often alter the articles to adopt updated provisions, change share-transfer rules, or add entrenchment provisions.

Why Alter the AOA

Altering the AOA serves several purposes:

  • Updates Rules: It modernises the company’s internal rules.
  • Changes Share Terms: It can change the rules on shares and their transfer.
  • Adjusts Powers: It adjusts the powers of the board and the members.
  • Adds Provisions: It can add entrenchment or other special provisions.
  • Supports Conversion: It accompanies a conversion between private and public.
  • Reflects Agreements: It aligns the articles with a shareholders’ agreement.

What the Articles Cover

The articles govern the company’s internal affairs:

  • Share Rules: The issue, transfer, and rights of shares.
  • Board Powers: The composition and powers of the board.
  • Meetings: The conduct of board and general meetings.
  • Dividends: The declaration and payment of dividends.
  • Borrowing: The company’s borrowing powers.
  • Special Provisions: Entrenchment and other tailored provisions.

What an Alteration Needs

An AOA alteration requires:

  • Board Resolution: The board approves and calls a general meeting.
  • Special Resolution: The members pass a special resolution.
  • MGT-14: The resolution is filed in MGT-14 within 30 days.
  • Altered Articles: The articles are updated to reflect the change.
  • No RD Approval: Central Government approval is not generally required.
  • Conversion Note: A private-public conversion follows its own process.

When the AOA Is Altered

The AOA is altered:

  • When the company updates or replaces its articles.
  • When it changes the rules on shares or their transfer.
  • When it adjusts the board’s or members’ powers.
  • When it adds entrenchment or special provisions.
  • When it converts between a private and a public company.

The Process

Altering the articles begins with a board resolution approving the change and calling a general meeting, where the members pass a special resolution. The articles are amended to reflect the change, and the company files Form MGT-14 with the Registrar within 30 days, attaching the resolution and the altered articles. For most alterations, no further approval is needed and the change takes effect on filing. Where the alteration accompanies a conversion between a private and a public company, the relevant conversion process and forms are followed alongside. The filing is made on the MCA V3 portal, after which the company’s articles stand altered on the record.

Documents Required

For the Alteration:

  • The board and special resolutions, and the notice and explanatory statement of the general meeting.
  • The altered Articles of Association.

Supporting:

  • The existing articles for reference.
  • Any documents for an accompanying conversion where the change relates to one.

AOA Alteration Process

An AOA alteration follows a clear sequence:

  1. Identify the change to the articles.
  2. Pass a board resolution and call a general meeting.
  3. Pass the special resolution approving the change.
  4. Amend the articles to reflect the change.
  5. File MGT-14 within 30 days with the resolution and articles.
  6. Complete any accompanying conversion process.
  7. Receive the updated record from the Registrar.

Alter your AOA with Samkhya

Altering your AOA with Samkhya Corporate Services is simple. Just follow these easy steps:

  • Tell us what to change: Share the change you wish to make.
  • We draft the articles: We prepare the altered articles and resolution.
  • Fill the form: Complete our online form and provide the documents.

From there, our team handles the resolution, altered articles, and MGT-14 filing.

After the Alteration

Once the articles are altered:

  • Articles Updated: The articles reflect the alteration.
  • Records Aligned: The MCA records show the change.
  • Rules in Force: The new internal rules are in force.
  • Consistent Documents: The articles align with any shareholders’ agreement.
  • Keep Records: Retain the resolution and the altered articles.
  • Inform Stakeholders: Inform those affected by the change.

Fees and Timeline

Altering the articles is one of the simpler charter changes: the main cost is the modest MGT-14 filing fee, with professional charges separate, and there is generally no stamp duty or Regional Director approval as there can be for some Memorandum changes. The discipline is the 30-day deadline for filing MGT-14 from the special resolution, after which the usual per-day additional fees apply. Because most AOA alterations take effect on filing without a further approval stage, the timeline is short, typically the time needed to hold the general meeting and file the form. The exception is where the alteration accompanies a conversion between a private and a public company, which adds the steps of that separate process.

AOA Alteration at a Glance

Feature Detail
Governing Law Section 14, Companies Act 2013.
Approval Special resolution of members.
Key Form MGT-14, within 30 days.
RD Approval Not generally required.
Document Altered Articles of Association.
Portal MCA V3.

Frequently Asked Questions

What is the AOA?

The Articles of Association are a company’s internal rulebook, governing its shares, board, meetings, powers, and other aspects of how it is run.

How is the AOA altered?

The members pass a special resolution under Section 14, the articles are amended, and the company files Form MGT-14 within 30 days.

Does an AOA change need Central Government approval?

No, not generally. A special resolution and MGT-14 are enough, except where the change accompanies a conversion between a private and a public company.

What is the difference between the MOA and AOA?

The MOA is the company’s charter setting out its name, objects, and capital, while the AOA contains the internal rules for managing the company.

What is entrenchment?

An entrenchment provision makes certain articles harder to change by requiring a more stringent procedure than a special resolution; it can be added by altering the articles.

How long does it take?

An AOA alteration is usually quick, as most changes take effect on filing MGT-14 without a further approval stage.