Skip to content

CS Executive · Company Law and Practice · Memorandum and Articles of Association and its Alteration

Ganga Pharma Ltd altered its articles but kept issuing printed copies of the old articles to new members without noting the alteration. Under section 15, what is the consequence?

The company and every officer in default are liable to a penalty of one thousand rupees for every copy issued without the alteration. Section 15 requires every alteration to be noted in every copy, and the penalty is counted per copy, not as a lump sum.

  1. ANo liability, as only the Registrar's copy needs updating
  2. BPenalty of one thousand rupees for every copy issued without the alteration, on the company and every officer in defaultCorrect
  3. CPenalty of one thousand rupees in total, irrespective of the number of copies
  4. DAutomatic cancellation of the alteration

Explanation

Section 15(1) requires every alteration to be noted in every copy of the articles. Under section 15(2), the company and every officer in default are liable to a penalty of one thousand rupees for every copy issued without the alteration. The penalty is per copy, not a lump sum, and the alteration itself is not cancelled.

Did you get it right without looking?

One question tells you little. A timed set on Memorandum and Articles of Association and its Alteration shows your real accuracy, how long you take and where you lose marks.

Practise Memorandum and Articles of Association and its AlterationFree diagnostic mock

More Memorandum and Articles of Association and its Alteration questions