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

Himalaya Foods Pvt Ltd, a private company, wants to change its articles to insert a new clause on the manner of calling board meetings. The articles are silent on any special procedure. Which resolution is needed under the Companies Act, 2013 for this alteration?

A special resolution is required. Section 14(1) allows a company to alter its articles by special resolution, subject to the Act and the memorandum. A mere ordinary resolution or a board decision is not enough for such an alteration.

  1. AOrdinary resolution
  2. BSpecial resolutionCorrect
  3. CResolution of the board alone
  4. DUnanimous written consent of all creditors

Explanation

Section 14(1) permits a company, subject to the Act and the conditions in its memorandum, to alter its articles by a special resolution. An ordinary resolution or a board resolution alone does not meet this requirement. Creditor consent is not required for an ordinary alteration of articles.

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