Alteration of the Articles of Association
The second most important document for Joint Stock Company is the Articles of Association. It is a document that contains the purpose of the company as well as the duties and responsibilities of its members defined and recorded clearly. The document that contains all rules and regulations regarding daily activities and internal management of the company is called Articles of Association.
Generally, it is possible to alter the Articles of Association by taking or on the basis of special decision without the court order. New Articles of Association may be adopted by the shareholders passing a special resolution in a general meeting or by written resolution.
But while doing so, it needs special attention regarding the following aspects:
- Alteration must not be Anti-Companies Act.
- This alteration would not be anti of the provisions stated in the Memorandum of Association- it cannot be made in breach of other company law rules.
- It must not be against of the company’s interest.
- These changes should not create the liability of the shareholders.
- The right to change should be lawful.
- Any changes in the Article must he toward the welfare of the shareholders.
- If there any mistakes in the Article, the Court has no right to change it.
- The notice of the change should be noticed by every member.
- It must not be anti of any order of the court.
- These types of change must not be for the purpose of breaching of the contract made with the third party.
Before the alteration of the supped of Articles of Association, above all the aspects should be considered carefully so that each of the members can’t be deprived.