Section 13: Companies Act- Incorporating companies and compliances in India
Section 13 of the Companies Act, 2013 deals with the memorandum of association of a company. It defines the scope and powers of the company, its objects, and the relationship between the company and its members. The section lays down various provisions relating to the memorandum of association, such as its contents, alteration, and effect.
Section 13(1) of the Companies Act, 2013: This subsection requires every company to have a memorandum of association that specifies the name of the company, its registered office, the objects of the company, and its authorized share capital.
In Re: J.P. International Limited, (2017) SCC Online NCLT 744: In this case, the National Company Law Tribunal held that the memorandum of association of a company is a foundational document that defines the scope and powers of the company and its relationship with its members.
Section 13(2) of the Companies Act, 2013: This subsection prohibits a company from altering the provisions of its memorandum of association that relates to its objects, unless it is authorized by the Tribunal or by a special resolution of the members.
In Re: Akme Projects Limited, (2016) SCC Online NCLT 1179: In this case, the National Company Law Tribunal held that the alteration of the objects clause in the memorandum of association must be bonafide and in the interest of the company, and not for any fraudulent or illegal purposes.
Rule 8 of the Companies (Incorporation) Rules, 2014: This rule prescribes the format and contents of the memorandum of association of a company.
Section 13(3) of the Companies Act, 2013: This subsection provides that the memorandum of association of a company shall be in the form and manner prescribed by the rules.
Section 13(4) of the Companies Act, 2013: This subsection provides that any provision contained in the memorandum of association of a company that is inconsistent with the provisions of the Companies Act, 2013 shall be void.
In Re: Sudarshan Chemical Industries Limited, (2020) SCC Online NCLT 845: In this case, the National Company Law Tribunal held that the provisions of the memorandum of association of a company cannot override the mandatory provisions of the Companies Act, 2013.
Section 13(5) of the Companies Act, 2013: This subsection provides that any alteration of the memorandum of association of a company shall be effective only upon the registration of the same with the Registrar of Companies.
In Re: R.M. Muthiah Chettiar Charitable and Educational Trust, (2020) SCC Online Mad 2424: In this case, the Madras High Court held that the alteration of the memorandum of association of a company takes effect only upon the registration of the same with the Registrar of Companies, and not from the date of passing the resolution.
Section 13(6) of the Companies Act, 2013: This subsection provides that the registration of the memorandum of association of a company shall be conclusive evidence that all the requirements of the Act with respect to the registration and matters precedent and incidental thereto have been complied with.
Section 13(7) of the Companies Act, 2013: This subsection provides that a company may alter the provisions of its memorandum of association with respect to its objects by passing a special resolution and obtaining the prior approval of the Tribunal, in accordance with the provisions of Section 13(2) of the Act.
In Re: Tata Sons Limited, (2019) SCC Online Bom 1178: In this case, the Bombay High Court held that the provisions of the Companies Act, 2013 and the Articles of Association of a company can override the provisions of the memorandum of association, and that the memorandum of association of a company cannot be used as a shield to protect acts that are oppressive or prejudicial to the interests of minority shareholders.
Rule 13 of the Companies (Incorporation) Rules, 2014: This rule provides that in case of alteration of the memorandum of association of a company, the company shall file an application in the prescribed form along with the prescribed fee, with the Registrar of Companies.
Section 13(8) of the Companies Act, 2013: This subsection provides that if a company alters the provisions of its memorandum of association, it shall, within 30 days of such alteration, file a copy of the memorandum as altered with the Registrar of Companies.
Rule 14 of the Companies (Incorporation) Rules, 2014: This rule provides that the copy of the memorandum of association as altered shall be accompanied by a printed copy of the memorandum of association as altered, and a certificate by a company secretary or a chartered accountant in practice certifying that the alteration has been made in compliance with the provisions of the Act and the rules made thereunder.
Section 13(9) of the Companies Act, 2013: This subsection provides that the alteration of the memorandum of association of a company shall not have any effect until the Registrar of Companies issues a certificate of incorporation of the company as altered.
In Re: Goldfinch Hotels Private Limited, (2020) SCC Online Bom 105: In this case, the Bombay High Court held that the certificate of incorporation issued by the Registrar of Companies after the alteration of the memorandum of association of a company is conclusive evidence that the requirements of the Act with respect to the alteration have been complied with.
Section 13(10) of the Companies Act, 2013: This subsection provides that where the memorandum of association of a company is altered by the substitution of a new memorandum, the company shall be deemed to be a new company, and the provisions of Section 4 of the Act with respect to the registration of a company and matters precedent and incidental thereto shall apply to the company as if it were a new company incorporated under the Act.
Rule 15 of the Companies (Incorporation) Rules, 2014: This rule provides that in case of alteration of the memorandum of association of a company by the substitution of a new memorandum, the company shall file an application for the registration of the company as a new company in the prescribed form along with the prescribed fee, with the Registrar of Companies.
Section 13(11) of the Companies Act, 2013: This subsection provides that a company may alter the provisions of its articles of association by passing a special resolution in accordance with the provisions of the Act.
In M/s. Innoventive Industries Limited v. ICICI Bank Limited, (2017) 1 SCC 270: In this case, the Supreme Court held that the articles of association of a company constitute a contract between the company and its members, and that the provisions of the articles of association can be enforced by the members of the company.
Rule 18 of the Companies (Share Capital and Debentures) Rules, 2014: This rule provides that in case of alteration of the articles of association of a company, the company shall file an application in the prescribed form along with the prescribed fee, with the Registrar of Companies.
Section 14 of the Companies Act, 2013: This section provides for the form and content of the articles of association of a company, and specifies certain matters that must be included in the articles of association.
Rule 19 of the Companies (Share Capital and Debentures) Rules, 2014: This rule provides for the form of the articles of association of a company, and specifies the matters that must be included in the articles of association in accordance with Section 14 of the Act.
Section 15 of the Companies Act, 2013: This section deals with the alteration of the objects clause of the memorandum of association of a company. It provides that a company may alter the objects clause of its memorandum of association by passing a special resolution in accordance with the provisions of the Act.
In Ashbury Railway Carriage and Iron Co. (Ltd.) v. Riche, (1875) LR 7 HL 653: In this case, the House of Lords held that the objects clause of the memorandum of association of a company defines the scope of the activities that the company can undertake. Any activity outside the scope of the objects clause is ultra vires and void.
Rule 20 of the Companies (Incorporation) Rules, 2014: This rule provides that in case of alteration of the objects clause of the memorandum of association of a company, the company shall file an application in the prescribed form along with the prescribed fee, with the Registrar of Companies.
Section 13(8) of the Companies Act, 2013: This subsection provides that where the memorandum of association of a company is altered by the addition, deletion or alteration of the name of the company, the company shall also pass a special resolution for changing its name.
Rule 29 of the Companies (Incorporation) Rules, 2014: This rule provides that in case of alteration of the name of a company, the company shall file an application in the prescribed form along with the prescribed fee, with the Registrar of Companies.
Section 16 of the Companies Act, 2013: This section deals with the effect of alteration of the memorandum or articles of association of a company. It provides that any alteration of the memorandum or articles of association of a company shall be effective and binding on the company and its members and creditors.
In Tata Engineering and Locomotive Co. Ltd. v. State of Bihar, (1964) 34 Comp Cas 1 (SC): In this case, the Supreme Court held that any alteration of the memorandum or articles of association of a company that is made in accordance with the provisions of the Companies Act, 1956 (which has been replaced by the Companies Act, 2013) shall be binding on the company and its members and creditors.
Section 17 of the Companies Act, 2013: This section provides for the rectification of the name of a company in case of a discrepancy between the name of the company as stated in its memorandum of association and as stated in its registration certificate.
Rule 30 of the Companies (Incorporation) Rules, 2014: This rule provides that in case of rectification of the name of a company, the company shall file an application in the prescribed form along with the prescribed fee, with the Registrar of Companies.
These provisions and rules provide for the effect of alteration of the memorandum or articles of association of a company and the rectification of the name of a company in case of discrepancy. Companies must comply with these requirements to ensure that any alteration or rectification is effective and legally binding.
By Siddharth Dalmia
the StartUp Sherpa
+91-9971799250
dalmiasiddharth1994@gmail.com
