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

Kaveri Foods Pvt Ltd amends its articles and removes the restrictions and limitations that the Act requires articles of a private company to contain. No other step is taken. What is the legal effect from the date of alteration?

The company ceases to be a private company from the date of the alteration. The proviso to Section 14(1) provides this consequence automatically when the articles no longer include the restrictions and limitations that the Act requires for a private company.

  1. AThe alteration is void because conversion needs Tribunal sanction
  2. BThe company continues as a private company until the Registrar issues a notice
  3. CThe company ceases to be a private company from the date of alterationCorrect
  4. DThe company becomes a one person company

Explanation

The first proviso to Section 14(1) says that where a private company alters its articles so that they no longer include the required restrictions, it ceases to be a private company as from the date of such alteration. Waiting for a Registrar notice is not required.

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