Alteration of articles

ALTERATION OF ARTICLES:

Companies have been given very wide powers to alter theierer the articles, the right to alteration of articles is so important that a company cannot in any manner, either by express provision in the articles or by an independent contract,deprive itself of the power to alter its articles.

PROCEDURE OF ALTERATION:

A company may,by passing a special resolution, alter its articles any time. Again any articles may be adopted which could have been lawfully included originally.LIMITATION TO

ALTERATION:

1.must not be inconsistent with the act:

The alteration of the articles must not be inconsistent with, or go beyond, the provisions of the companies act.

2.must not conflict with the memorandum:

The alteration of the articles must not exceed the power given by the memorandum. Or conflict with the provisions of thehat the power of alteration must be memorandum.

3.must not sanction anything illegal:

The alteration must not purport to sanction anything which is illegal. But if it is legal and it is not clearly prohibited by the memorandum, it alters the whole structure of the company.

4.must be for the benefit of the company:

The alteration must be made bona fide for the benefit of the company as a whole. That the power of alteration must be excercised subject to these genral principals of law and equity which are applicable to all powers conferred on mejorities to bind minorities.

5.must not increase liability of members:

The alteration must not in any way increase the liability of the existing members to contribute to the share capital of, or otherwise pay money to, the company unless they agree in writing before or after the alteration is made.

6.alteration by special resolution only:

Even clerical errors in the articles should be set right by a special resolution.