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Alteration of Articles of Association:The Power to alter the Articles of Association(A/A) is provided under section 31 of the Companies Act,1956.

Hence, a company cannot provide that its articles cannot be altered or the articles are to remain unaltered. The following points have to be observed while altering the articles of association, namely:1) it must be bonafide in the interest of the company and for the benefit of the company as a whole. 2) it should not constitute a fraud on the minority. 3) it should not operate as a breach of contract with the outsider. 4) it cannot require a member to purchase more shares or increase his liability in any way except with his consent in writing. Procedure for alteration of articles of association:The Board of directors (Bod)has to approve the proposal and decide on the date and time of the general meeting. The notice of the meeting has to be sent to the members. General Meeting has to be held and a SPECIAL RESOLUTION Passed. A copy of the special resolution has to be filed with the Registrar of Companies (ROC) through Form 23 within 30 days of the special resolution. Any alteration made in the A/A shall be valid(subject to the provisions of the Act) as if originally contained in the A/A. An alteration made can be further altered by a special resolution. Procedure for conversion of a Private company into a Public company:A Private company can be converted in to a public company in two ways, namely:1) by own volition (ones free will) - The BOD must consider the proposal to convert into a public company and approve the same. They should decide the time and place of the General meeting. - In the general meeting held, a special resolution has to be passed to the following effect:(i) To delete those Articles which are required to be included in the A/A of a Private company only. (ii) Consequent to the above changes, to delete the word private from its name. - The copy of the special resolution has to be filed with the ROC within 30 days of the resolution. -The company shall file with the ROC, within 30 days of the date of alteration, either a prospectus (if there is a public issue) or a statement in lieu of prospectus( in case there is no public issue). - Increase the number of members to a minimum of seven if it is less than seven and if the number of directors is less than three, to increase it to minimum three. -The change of name shall be noted on the Memorandum of Association and A/A, letter heads, invoices, seals etc. The Company becomes public from the date of passing the special resolution to this effect but the change of the name of the company, by deleting the word private, will become effective only on the issue of fresh certificate of incorporation by the ROC. 2) by reason of default:A private company has to include certain restrictions in its A/A like no free transferability of shares, no invitation to public to subscribe for shares in the company, the number of members limited to fifty etc. When a default is made and the aforesaid restrictions are not included in the A/A or are not followed, the company shall cease to be a private company from the date of default and it shall not be entitled to the privileges and exemptions conferred on the private company for the purposes of the Act. S.43A(2) provides that when a private company ceases to be a private company as above, it shall inform the ROC that it has become a public company within three months from the date on which a private company becomes a public company and thereupon the ROC shall delete the word private before Limited and make necessary changes in the certificate of incorporation. Such a company may continue to have less than7 members and may continue to contain restrictions usually contained in the A/A of a Private company. Conversion of a Public Company in to a Private Company:-The BOD has to consider the proposal and approve the same. -The BOD should decide the date of the meeting of the shareholders and arrange to send the notices of the meeting. -The general meeting has to be held and a SPECIAL RESOLUTION passed amending the A/A to include the

restrictions prescribed under the Act for a private company. Further, the name of the company should be changed so that it should end with the words private limited. -The special resolution and the explanatory statement has to filed with the ROC within 30 days of passing the resolution. -Six copies of the amendments made in the A/A(one copy certified) has to be forwarded to the stock exchange where the company is listed. -An approval to the conversion has to be obtained from the Central Govt. No alteration made in the A/A which has the effect of converting a public company into a private company shall have effect unless such alteration has been approved by the Central Govt. -The Central Govt.(by delegation, Regional Director)on receipt of application MAY require a suitable notice to be published in a newspaper. -three copies of the notices and the proceedings of the general meeting should be promptly forwarded to the stock exchange where the company is listed. -Where the alteration has been approved by the Regional Director, a printed copy of the altered A/A must be filed by the company with the ROC within one month of the date of the receipt of the order of approval to get the certificate of incorporation altered by the ROC. -The change will be incorporated in the M/A and A/A and noted in all bills, invoices, letter heads, seal etc. It should thus be noted that although the company becomes private company as soon as the approval of the Central Govt. is received for conversion, the change in its name becomes effective only on the issue of the Certificate of incorporation by the ROC in the changed name.