There is no secrecy to the fact that Memorandum of Association is an important document that outlines a private limited company’s objectives and operations. However, as your business evolves, you may find the need to make changes to the MOA. In this extensive guide, we’ll walk you through the process of modifying the MOA after completing the private limited company registration online.
Understanding the Memorandum of Association (MOA)
The Memorandum of Association (MOA) is a legal document. It defines the scope of a company’s business activities and also clears the relationship between the company and its shareholders. Moreover, you need to submit the MOA of your company during the company registration process. This MOA you submit becomes the constitution of your company. Besides, any changes you make to the MOA require MCA Compliance and adherence to specific procedures.
Common Reasons for Modifying the MOA
Apart from the growth and expansion of your business, there are several reasons why you might need to modify your MOA. Here are the reasons:
Change in Business Activities
Change is the only constant. So, with time, your company might decide to diversify the business activities. Moreover, New opportunities or market demands may prompt a shift in your core operations.
Alteration of Registered Office Address
If your company decides to change its registered office address, you need to reflect this change in the MOA. The reason being the fact that the office address is the primary address for communication and hence plays a very important role in day to day business operations.
Alteration of Share Capital
Changes in share capital, such as an increase or decrease, require amendments to the MOA. So, if you are raising capital as a private company, you will need to amend your MOA.
Alteration in Authorized Shareholding
With the change in capital, there will also be changes in the shareholding structure. Moreover, if you need to make changes to the authorized structure, you need to update it on the MOA as soon as possible.
Procedure for Modifying the MOA
Board Resolution
The first step of modifying an MOA is that the Board of Directors need to pass a resolution of the board. This resolution must be about the proposal to amend the MOA. Moreover, you need to document and keep this resolution on record for future reference.
Conducting Extraordinary General Meeting (EGM)
Next, you need to conduct an extraordinary general meeting (EGM). Here, you also need to inform the shareholders about the proposed changes to the MOA.
Approval by Shareholders
The shareholders of a private company are its owners. Hence, any major business decision requires the approval of the shareholders. This includes the passing of a special resolution.
Besides, a special resolution requires a majority vote of at least 75% of shareholders present and voting.
Filing Form MGT-14 with the Registrar of Companies (RoC)
After obtaining shareholder approval, the company must file Form MGT-14 with the RoC within 30 days of passing the resolution. The MGT – 14 is a form that the business owners can submit in order to complete certain filings with the Ministry of Corporate Affairs.
Submission of Updated MOA and AOA
The company must submit the amended MOA to the RoC within 30 days of passing the special resolution. Along with the MOA, you also need to submit the Articles of Association (AOA) should also be submitted.
Approval by RoC
The RoC plays a pivotal role in reviewing the submitted documents. If the RoC finds everything in order and compliant with legal provisions, they issue a Certificate of Registration of the Special Resolution. This certificate serves as formal acknowledgment and validation of the changes made to the MOA. Companies should maintain open lines of communication with the RoC during this phase, addressing any queries promptly to expedite the approval process.
Publication in Official Gazette
Post-approval by the RoC, the company is mandated to publish a notice of the resolution in the Official Gazette within 30 days. This step enhances transparency, ensuring that the general public, including stakeholders and potential investors, is aware of the modifications made to the company’s MOA. Publication in the Official Gazette serves as a public record, further solidifying the legal standing of the amended MOA.
Update Records
The final step involves updating internal and external records to reflect the changes made to the MOA. This includes updating the company’s records, informing regulatory bodies, and ensuring that all stakeholders are aware of the modifications. Clear communication is essential during this phase to avoid any confusion or misunderstandings regarding the company’s current operating framework.
Conclusion
In conclusion, the process of modifying the Memorandum of Association (MOA) after online private limited company registration in India is a meticulous and legally bound journey. Each step, from the initial board resolution to the final update of records, plays a vital role in ensuring compliance with regulatory requirements and maintaining transparency with stakeholders. While this guide provides a comprehensive overview, it is advisable to seek professional guidance to navigate the complexities of the legal landscape and facilitate a smooth modification process. Remember, the proactive and diligent approach to change in MOA is a testament to the commitment to the company’s growth and adaptability in the dynamic business environment.
