SECTION 31         ALTERATION OF ARTICLES

 

 

 

1. Subject                     - Alteration of Articles of Association.

 

2.  Passing Authority     - General Meeting.

 

3. Nature of the Resolution - Special Resolution.

 

4. Specimen Resolution(s)

 

                A. WHERE NEW SET OF ARTICLES OF ASSOCIATION IS ADOPTED.

 

                      "That the regulations contained in the printed document submitted to the meeting

                    and for the purpose of identification signed by the Chairman thereof be and the

                    same are hereby approved and adopted as the Articles of Association of the                 Company  in subsitution for and to the exclusion of all existing articles thereof."

 

                B. WHERE ONLY SOME ARE ALTERED

 

                      "That the Articles of Association of the Company be and are hereby altered in the

                         manner following:

 

                     (i) After Article 5 the following new Articles to be headed 'MANAGING DIRECTORS'

                         and numbered 5A to 5D shall be inserted as under:

 

                     5A. Subject to the provisions of sections 197A, 316 and 317 of the Companies Act, 1956, the

                             Board may from time to time appoint one or more Directors to be the Managing Director

                             or Managing Directors of the company and may from time to time (subject to the provisions

                             of any contract between him or them and the Company) remove or dismiss him or them

                             from office and appoint another or others in his or in their place or places.

 

 

                  5B.   Susbject to the provisions of section 255 of the Companies Act, 1956, a Managing Director

                           shallnot while be continues to hold that office be subject to retirement by rotation, and be

                           shall not be reckoned as a Director for the purpose of determining the rotation of

                           retirement of Directors or in fixing the number of directors to retire but (subject to the

                           provisions of any contract between him and the Company ) he shall be subject to the same

                           provisions as to resignation and removal as the other Directors and he shall ipso facto

                           and immediately, cease to be a Managing Director if he ceases to hold the office of

                           Director from any cause.

 

                          If at any time the total number of Managing Directors is more than one-third of the total

                         number of Directors, the Managing Directors who shall not retire shall be determined by

                         and in accordance with their respective seniorities of the Managing Directors shall be

                         determined by the dates of their respective appointments as Managing Directors by the

                         Board.

 

                5C. Subject to the provisions of sections 309, 310 and 311 of the Companies Ackt 1956, a

                      Managing Director shall in addition to the remuneration payable to him as a Director

                      of the Company under these Arjticles receive such additional remuneration as may from

                      time to time be sanctioned by the Company.

 

                5D. Subjejct to the provisions of the Companies Act, 1956 and in parjticular to the prohibitions

                       and restrictions contained in section 292 thereof, the Board may fjrom time to time entrust

                       to and confer upon a Manajging Director for the time being such of the powers exercisable

                       under these presents by the Board as it may think fit and may confer such powers for such

                       time and to be exercised for such objects and purposes and upon such terms and conditions

                       and with such restrictions as it thinks fit and the Board may confer such powers either

                       collaterally with or to the exclusion of and in subsitution for all or any of the powers of the

                       Board in that behalf and may from time to time revoke, withdraw, alter or vary all or any of such

                        powers.

 

                 (ii) Articles72 deleted and the following new Article substituted therefor;

 

Section 31

                                '72 . The number of Directors shall not be less than 3 nor more than 12.'

                 (iii) Clause (a) of article 75 shall be deleted.

 

                (iv) In Article 80 the words 'atleast once in every three months' shall be substituted for the

                      words 'once in every month".

 

5. Guidelines:

 

                (1) Approval of the Central Government should be obtained if necessary e.g. amendment

                     of anyu provision in the Arjticles relating to Managing Directors, (Section 268) or where                                    the alteration has the effect of converting a public company into a private company.

 

                (2) Before proposing the resolution the conditions if any, in the Memorandum restricting the                  alteration should be  looked into.  The power to alter is limited by the provisions contained

                     in the Company's Memorandum.

 

                (3) Clerical Errors in the Articles should be set right by a special resolution.

 

                (4) It maybe noted that effect can not be given to an Arjticle which reserves the power of the

                     Company to alter its Articles by an Ordinary Resolution in General Meeting as it would

                     amount to getting round the provisions of the Section in an indirect manner.

 

                (5) The Ordinaklry rule relating to alteration of Articles is that everything in the Articles

                     which is not provided for  by the Memorandum may be altered by a special resolution.

 

                (6) An Article which provides that no alteration shall be made in the Company's Articles of                     Association without the consent of a particular person is invalid.

 

                (7) The alteration must be bonafide and in the interests of the company.

 

                (8) Alteration to the Articles may generally bemade with restrospective effect.

 

                (9) Where it is proposed to adopt new set of Articles, it is not sufficient compliance if the

                      notice merely specifies that copies of the proposed Articles are deposited at the registered

                      office for inspection (specially where majority of shareholders reside at long distances

                      from office)

 

                6. Filing

 

                (a)  Form 23 within 30 days.

 

                (b) Printed copy of the Articles as altered in the case of conversion of a Public Company into

                     a Private Company (within  one month of the date of receipt of Central Government's approval).