Understanding MOA & AOA Amendments

The Memorandum of Association (MOA) and Articles of Association (AOA) are foundational legal documents for any company incorporated in India.

• Memorandum of Association (MOA): The MOA is the company's charter document. It defines the company's scope, objectives, and powers. It contains fundamental clauses such as:

  • Name Clause: The company's name.

  • Registered Office Clause: The state in which the company's registered office is situated.

  • Objects Clause: The main business activities the company is authorized to undertake.

  • Liability Clause: The limited liability of the company's members.

  • Capital Clause: The authorized share capital of the company.

  • Subscription Clause: Details of the initial subscribers to the MOA.

• Articles of Association (AOA): The AOA is the internal rulebook of the company. It governs the internal management and operations of the company, defining the rights, duties, and powers of the directors and members. It covers aspects like:

  • Rules for Board Meetings and General Meetings.

  • Appointment, removal, and powers of directors.

  • Share transfer, transmission, and forfeiture.

  • Dividend declaration.

  • Borrowing powers.

Why Amend MOA/AOA?

Amendments become necessary for various reasons, including:

• Business Expansion: Adding new business activities (Objects Clause).

• Change of Name: Altering the company's name (Name Clause).

• Registered Office Shift: Moving the registered office to a different state (Registered Office Clause).

• Capital Restructuring: Increasing or decreasing authorized share capital (Capital Clause).

• Internal Governance Changes: Modifying rules for director appointments, share transfers, voting rights, etc. (AOA).

• Compliance with New Laws: Adapting to changes in the Companies Act or other regulations.

General Amendment Process for MOA & AOA

The process for amending the MOA and AOA generally involves:

1. Board Meeting: Obtain Board approval for the proposed alteration and authorize calling an Extra-ordinary General Meeting (EGM) or include the agenda in the upcoming Annual General Meeting (AGM) notice.

2. General Meeting (EGM/AGM): Obtain shareholder approval by passing a Special Resolution (requiring 75% or more votes in favor) for most alterations, especially those concerning the MOA and significant AOA changes. Some minor AOA changes might only require an Ordinary Resolution if the AOA specifically permits it.

3. ROC Filing: File the necessary forms (primarily Form MGT-14) with the Registrar of Companies (RoC) within the prescribed timelines.

4. ROC Approval/Certification: The amendment becomes effective only after the RoC's approval or registration.

Specific Amendment Processes (Detailed)

1. Alteration of Memorandum of Association (MOA)

Any alteration to the MOA, except for the capital clause (which can sometimes be increased by Ordinary Resolution), generally requires a Special Resolution passed by shareholders.

A. Alteration of Name Clause (Company Name Change)

• Requirements: Special Resolution. Requires prior name approval from Central Government (RoC) via RUN form.

• Process:

  1. Board Meeting: Approve name change, authorize RUN form filing.

  2. RUN Form: File RUN (Reserve Unique Name) form on MCA portal to reserve the new name.

  3. EGM: Hold EGM, pass Special Resolution for name change and consequential alteration of MOA and AOA.

  4. MGT-14: File Form MGT-14 with RoC within 30 days of passing Special Resolution. (Attachments: EGM Notice, Special Resolution, altered MOA & AOA).

  5. INC-24: File Form INC-24 with RoC to obtain Central Government approval. (Attachments: EGM Minutes, Affidavit of No Default, SRN of MGT-14).

  6. New Certificate of Incorporation: RoC issues Form INC-25 (New Certificate of Incorporation) with the new name. The name change is effective from this date.

  7. Post-Change Compliances: Update PAN/TAN, GST, bank accounts, stationery, etc.

B. Alteration of Registered Office Clause (Change of State)

• Requirements: Special Resolution. Central Government (Regional Director) approval is mandatory.

• Process:

  1. Board Meeting: Approve the shift and authorize EGM.

  2. EGM: Pass Special Resolution for shifting registered office and altering MOA.

  3. MGT-14: File Form MGT-14 with RoC within 30 days. (Attachments: Special Resolution, EGM Notice, altered MOA).

  4. Newspaper Advertisement (INC-26): Publish notice in newspapers (vernacular & English) at least 30 days before filing application with RD.

  5. Individual Notices: Send individual notices to creditors, debenture holders, and RoC (and SEBI for listed companies) about the proposed shift.

  6. INC-23: File Form INC-23 (Application to Regional Director) with extensive attachments (including creditor list, affidavits, newspaper ad proof, SRN of MGT-14).

  7. RD Order: Regional Director issues an order of confirmation after review (may involve hearings for objections).

  8. INC-28: File Form INC-28 with both old and new RoCs within 30 days of RD order to register the order.

  9. INC-22: File Form INC-22 (Notice of registered office change) with the new RoC within 30 days of RD order, confirming the new address.

  10. New Certificate of Incorporation: The RoC of the new state issues a new Certificate of Incorporation.

  11. Post-Change Compliances: Update all registrations, banks, stationery, etc.

C. Alteration of Objects Clause (Change/Addition of Business Activities)

• Requirements: Special Resolution.

• Process:

  1. Board Meeting: Approve the alteration and authorize EGM.

  2. EGM: Pass Special Resolution for altering the Objects Clause.

  3. MGT-14: File Form MGT-14 with RoC within 30 days of passing Special Resolution.

  • Attachments: Special Resolution, EGM Notice, altered MOA (with new objects).

  1. ROC Approval: The alteration becomes effective upon filing and registration by the RoC.

D. Alteration of Capital Clause (Increase in Authorized Share Capital)

• Requirements: Usually an Ordinary Resolution, if the AOA permits. If not, the AOA must first be altered (requiring a Special Resolution), then the capital increase.

• Process:

  1. Board Meeting: Approve the increase and authorize EGM/AGM.

  2. EGM/AGM: Pass an Ordinary Resolution (or Special, if AOA requires).

  3. SH-7: File Form SH-7 with RoC within 30 days of passing the resolution.

  • Attachments: Resolution copy, altered MOA (with increased capital).

  1. Fees: Pay additional stamp duty and ROC fees on the increased authorized capital.

  2. ROC Approval: The increase is effective upon filing and registration by the RoC.

2. Alteration of Articles of Association (AOA)

Any alteration to the AOA generally requires a Special Resolution by shareholders. However, the AOA itself can prescribe specific rules for certain internal changes, which might sometimes allow an Ordinary Resolution if the AOA expressly permits it for specific clauses. But for safety and adherence to statutory practice, a Special Resolution is usually the norm for significant AOA changes.

• Requirements: Special Resolution (most common).

• Process:

  1. Board Meeting: Approve the proposed alteration to AOA and authorize EGM.

  2. EGM/AGM: Pass a Special Resolution for altering the specific clause(s) in the AOA.

  3. MGT-14: File Form MGT-14 with RoC within 30 days from the date of passing the Special Resolution.

  • Attachments: Certified true copy of the Special Resolution, Notice of EGM/AGM, Minutes of EGM/AGM, Altered Articles of Association (AOA).

  1. ROC Approval: The alteration becomes effective upon filing and registration by the RoC.

General Procedure for Filing Forms with MCA

All forms are filed electronically on the MCA portal (www.mca.gov.in).

1. Download e-Form: Download the relevant e-form (MGT-14, INC-24, SH-7, INC-23, INC-22, INC-28, RUN) from the MCA portal.

2. Fill Details: Accurately fill all required information in the e-form.

3. Attach Documents: Attach scanned copies of all necessary supporting documents (Board Resolutions, Special Resolutions, Notices, Minutes, altered MOA/AOA, affidavits, newspaper clippings, etc.) in PDF format.

4. Digital Signatures: The forms must be digitally signed by:

   • Director/KMP: An authorized director or Key Managerial Personnel (KMP - e.g., Company Secretary, CFO, CEO) of the company using their DSC.

   • Practicing Professional: Most forms require certification by a practicing Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant (CMA) who will affix their DSC.

5. Pre-fill and Check Form: Use the "Pre-fill" button to populate details and the "Check Form" button to validate for errors.

6. Upload & Pay: Upload the validated e-Form to the MCA portal and pay the prescribed government filing fees online.

7. SRN & Approval: A Service Request Number (SRN) will be generated. The RoC will process the form, and upon approval, the status of the company's documents will be updated in the MCA records. Some forms are straight-through processed (STP), while others require manual approval.

Post-Amendment Compliances

After the MOA/AOA amendment is registered by the RoC:

• Update MOA/AOA Copies: Ensure all physical and electronic copies of the company's MOA and AOA are updated to reflect the alterations.

• Circulate: If the changes are significant, inform relevant stakeholders (employees, shareholders, partners, banks).

• Other Registrations: If the amendment involves a change of name or registered office, update the new details with:

  • Income Tax Department (PAN/TAN)

  • GST authorities

  • Banks

  • PF/ESI authorities

  • Local municipal authorities (Shop & Establishment)

  • Any other regulatory bodies or licenses (e.g., IEC, FSSAI, industry-specific licenses).

• Website & Stationery: Update the company's website, letterheads, invoices, signboards, etc.

Penalties for Non-Compliance:

Failure to file the required forms within the prescribed timelines attracts significant late filing fees (which can be very high, INR 100 per day without upper limit for many forms). Non-compliance can also lead to fines for the company and its officers in default, and in severe cases, legal action.

Given the legal complexities and the strict compliance requirements, it is highly recommended to engage a Company Secretary or a corporate lawyer to handle MOA and AOA amendment processes. The processes for amending the Memorandum of Association (MOA) and Articles of Association (AOA) are fundamental to a company's evolution and are strictly governed by the Companies Act, 2013, and its associated rules. These amendments allow a company to adapt its foundational documents to changes in its business activities, capital structure, internal governance, or even its identity.

Here's a comprehensive breakdown of the MOA and AOA amendment processes:

I. Understanding MOA & AOA

• Memorandum of Association (MOA): This is the company's supreme charter, outlining its fundamental existence and external dealings. It contains crucial clauses:

  • Name Clause: The company's official name.

  • Registered Office Clause: The state where the company's official address is located.

  • Objects Clause: The primary and ancillary business activities the company is authorized to conduct.

  • Liability Clause: Specifies the limited liability of members.

  • Capital Clause: States the authorized share capital.

  • Subscription Clause: Details of initial subscribers.

• Articles of Association (AOA): This serves as the company's internal rulebook, governing its internal management and operations. It covers aspects such as:

  • Rules for conducting Board and General Meetings.

  • Appointment, powers, and removal of directors.

  • Share transfer, transmission, and forfeiture procedures.

  • Dividend declaration.

  • Borrowing powers.

II. Reasons for Amendment

Amendments to MOA/AOA are undertaken for various strategic or compliance reasons:

• Change of Name: Altering the company's official identity.

• Expansion of Business: Adding new types of business activities to the Objects Clause.

• Change of Registered Office: Shifting the company's official address, especially across state lines.

• Capital Restructuring: Increasing or decreasing authorized share capital, or altering share classes.

• Internal Governance Changes: Modifying rules related to board structure, voting rights, share transfer, etc.

• Compliance: Aligning with new legal or regulatory requirements.

III. General Amendment Process Overview

Most MOA and AOA amendments follow a similar general flow:

1. Board Meeting: A Board Resolution is passed to propose the amendment and to convene an Extraordinary General Meeting (EGM) or include the agenda in the upcoming Annual General Meeting (AGM) notice.

2. General Meeting: Shareholders pass a Special Resolution (requiring 75% or more of the votes in favor) to approve the alteration. For certain specific changes, like increasing authorized capital, an Ordinary Resolution (over 50% majority) might suffice if the AOA permits.

3. ROC Filing: The company files the necessary e-forms (primarily Form MGT-14) with the Registrar of Companies (RoC) through the Ministry of Corporate Affairs (MCA) portal within the prescribed timelines.

4. ROC Approval/Certification: The amendment usually becomes effective only after the RoC processes and approves the filing, sometimes by issuing a new certificate or registering the change.

IV. Detailed Processes for Specific Amendments

A. Alteration of Memorandum of Association (MOA)

Any change to the MOA, except for an increase in the capital clause (which can often be done via an Ordinary Resolution if the AOA allows), generally requires a Special Resolution.

1. Alteration of Name Clause (Company Name Change)

This is a multi-step process involving prior approval for the new name.

• Step 1: Board Meeting: Hold a Board Meeting to approve the proposed name change and authorize a director/Company Secretary to apply for name reservation.

• Step 2: Reserve Unique Name (RUN) Form: File the RUN (Reserve Unique Name) form on the MCA portal to check name availability and reserve the proposed new name. The name validity period is 20 days.

• Step 3: Extra-ordinary General Meeting (EGM): Hold an EGM and pass a Special Resolution for:

  • Changing the company's name.

  • Consequential alteration to the Name Clause of the MOA.

  • Consequential alteration to the AOA (if applicable).

• Step 4: File Form MGT-14: File Form MGT-14 with the RoC within 30 days of passing the Special Resolution.

  • Attachments: Notice of EGM, Special Resolution, altered MOA (showing the new name), altered AOA.

• Step 5: File Form INC-24: File Form INC-24 with the RoC to seek Central Government approval for the name change. This form is filed after MGT-14 is filed.

  • Attachments: Certified true copy of EGM Minutes, SRN of MGT-14, declaration from directors (confirming no default, etc.), altered MOA/AOA.

• Step 6: New Certificate of Incorporation (Form INC-25): Upon approval, the RoC issues a new Certificate of Incorporation (Form INC-25) with the new name. The name change is effective from the date of this certificate.

• Step 7: Post-Change Compliances: Update PAN/TAN, GSTIN, bank accounts, stationery, letterheads, website, and other registrations with the new name.

2. Alteration of Registered Office Clause (Change of State)

This is one of the most complex amendments, requiring Regional Director (RD) approval.

• Step 1: Board Meeting: Pass a Board Resolution approving the shift and authorizing the calling of an EGM.

• Step 2: Extra-ordinary General Meeting (EGM): Pass a Special Resolution for shifting the registered office from one state to another and altering the Registered Office Clause of the MOA.

• Step 3: File Form MGT-14: File Form MGT-14 with the RoC within 30 days of passing the Special Resolution.

  • Attachments: Special Resolution, EGM Notice, altered MOA.

• Step 4: Newspaper Advertisement (Form INC-26): Publish an advertisement in at least one vernacular newspaper and one English newspaper (circulating in the district of the current registered office) giving notice of the proposed shift. This must be done at least 30 days before filing the application with the Regional Director (RD).

• Step 5: Individual Notices: Send individual notices (by registered post) to all creditors, debenture holders, and the RoC (both old and new), and SEBI (for listed companies), informing them of the proposed shift.

• Step 6: File Form INC-23: File Form INC-23 (Application to Regional Director) with the RD within 30 days of filing MGT-14.

  • Extensive Attachments: Detailed list of creditors, affidavits (from directors about no retrenchment, non-pendency of investigations, etc.), newspaper advertisement proofs, acknowledgement of individual notices, copy of Board Resolution, Special Resolution, altered MOA, and SRN of MGT-14.

• Step 7: RD Order: The Regional Director reviews the application and may hold hearings if objections are received. Upon satisfaction, the RD issues an order confirming the shift.

• Step 8: File Form INC-28: File Form INC-28 with both the old and new RoCs within 30 days of receiving the RD order to register the order.

• Step 9: File Form INC-22: File Form INC-22 (Notice of registered office change) with the new RoC within 30 days of receiving the RD order. This form officially registers the new address.

  • Attachments: RD order copy, altered MOA, utility bill proof of new address (not older than 2 months), NOC from premises owner.

• Step 10: New Certificate of Incorporation (by new RoC): The RoC of the new state issues a fresh Certificate of Incorporation.

• Step 11: Post-Change Compliances: Update all statutory records, bank accounts, GST, PAN/TAN, licenses, and stationery with the new address.

3. Alteration of Objects Clause (Change/Addition of Business Activities)

• Step 1: Board Meeting: Pass a Board Resolution approving the alteration and authorizing the calling of an EGM.

• Step 2: Extra-ordinary General Meeting (EGM): Pass a Special Resolution for altering the Objects Clause.

• Step 3: File Form MGT-14: File Form MGT-14 with the RoC within 30 days of passing the Special Resolution.

  • Attachments: Special Resolution, EGM Notice, altered MOA (with the new objects).

• Step 4: ROC Approval: The alteration becomes effective upon filing and registration by the RoC.

4. Alteration of Capital Clause (Increase in Authorized Share Capital)

• Step 1: Board Meeting: Pass a Board Resolution approving the increase and authorizing the calling of an EGM/AGM.

• Step 2: General Meeting (EGM/AGM): Pass an Ordinary Resolution (if AOA permits) or a Special Resolution (if AOA does not explicitly permit or if also altering AOA for this).

• Step 3: File Form SH-7: File Form SH-7 with the RoC within 30 days of passing the resolution.

  • Attachments: Resolution copy, altered MOA (showing the increased capital).

• Step 4: Fees: Pay additional stamp duty and RoC fees on the increased authorized capital.

• Step 5: ROC Approval: The increase is effective upon filing and registration by the RoC.

B. Alteration of Articles of Association (AOA)

Any alteration to the AOA generally requires a Special Resolution by shareholders, as per Section 14 of the Companies Act, 2013.

• Step 1: Board Meeting: Pass a Board Resolution proposing the alteration to the AOA and authorizing the calling of an EGM/AGM.

• Step 2: General Meeting (EGM/AGM): Pass a Special Resolution for altering the specific clause(s) in the AOA.

• Step 3: File Form MGT-14: File Form MGT-14 with the RoC within 30 days from the date of passing the Special Resolution.

  • Attachments: Certified true copy of the Special Resolution, Notice of EGM/AGM, Minutes of EGM/AGM, Altered Articles of Association (AOA).

• Step 4: ROC Approval: The alteration becomes effective upon filing and registration by the RoC.

V. General Procedure for Filing Forms with MCA

All filings are done electronically on the MCA portal (www.mca.gov.in).

1. Download e-Form: Obtain the required e-form (e.g., MGT-14, INC-24, SH-7, INC-23, INC-22, INC-28, RUN) from the MCA portal.

2. Fill Details: Accurately complete all fields in the e-form.

3. Attach Documents: Upload scanned copies of all supporting documents (resolutions, notices, minutes, altered MOA/AOA, affidavits, newspaper clippings, etc.) in PDF format.

4. Digital Signatures: The forms must be digitally signed by:

   • Company Representative: An authorized director or Key Managerial Personnel (KMP) of the company using their Digital Signature Certificate (DSC).

   • Practicing Professional: Most forms require certification by a practicing Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant (CMA) who will affix their DSC.

5. Pre-fill and Check Form: Utilize the "Pre-fill" option to auto-populate details and the "Check Form" button to validate the form for errors.

6. Upload & Pay: Upload the validated e-Form to the MCA portal and remit the prescribed government filing fees online.

7. SRN & Approval: A Service Request Number (SRN) is generated upon submission. The RoC processes the form, and upon approval, the company's records are updated.

VI. Post-Amendment Compliances

Once the amendment is registered by the RoC:

• Update Documents: Ensure all physical and electronic copies of the company's MOA and AOA are updated to reflect the alterations.

• Inform Stakeholders: Communicate significant changes to employees, shareholders, creditors, and other relevant parties.

• Update Registrations: If the amendment involved a change of name or registered office, update all other statutory registrations (e.g., GST, PAN/TAN, bank accounts, PF, ESI, import-export code, specific industry licenses).

• Company Assets: Update the company's website, letterheads, invoices, signboards, and other branding materials.

VII. Penalties for Non-Compliance

• Late Filing Fees: Failure to file forms within prescribed deadlines attracts substantial daily late fees (e.g., INR 100 per day for many forms, often without an upper limit), which can quickly accumulate.

• Monetary Fines: The company and its officers in default may face significant monetary penalties.

• Legal Consequences: Non-compliance can lead to further legal action, including compounding of offenses or prosecution.

• Business Disruption: Delays in updating records can hinder business operations, such as opening new bank accounts, entering into contracts, or availing government benefits.

​