To what extent and by what methods may the various clauses in the memorandum of association of a company be altered.

• Date: Under section 6 (1) of the Companies Act the memorandum must be dated.
• Various clauses of the memorandum are alterable as follows:

• The Name Clause is alterable by special resolution and written consent of theregistrar pursuant to Section 20 (1) of the Companies Act. The registrar must be notified of the change within 14 days thereof.

• The Objects Clause is alterable by special resolution pursuant to Section 8 (1) ofthe Act. The resolution is registerable within 30 days thereof.

• The Liability Clause is alterable pursuant to Section 18 (1) of the Act where anunlimited company may be registered as limited.

• The Capital Clause is alterable pursuant to Section 63 (1), 65 (1) and 68 (1) of theCompanies Act. Whereas reduction of capital must be authorized by a special resolution. Other forms of alteration e.g. increase of capital, consolidation of shares or diminution of capital require an ordinary resolution.

• Particulars of Subscribers change when company membership changes by transferor transmission of shares.

Company law prescribe the extent to which a company may alter the various clauses of the memorandum e.g.

i) A company may change its name to the extent that:
 It is not in the opinion of the registrar undesirable.
 It is not too similar to that of an existing company.
 It does not mislead the public.

It does not suggest any patronage of the president government department or local authority.
 It does not suggest a criminal or immoral intent or purpose.

It contains the word limited as the last word where liability is limited by shares or guarantee.

It does not contain the term “center” or “co-operative” or any abbreviation thereof.

It does not contain the terms “bank”, “hotel” or “insurance” unless the company
carries on such business.

ii) A company may change its objects clause so far as may be necessary to enable it:
Carry on its business more economically or more efficiently.
 Attain its purpose by new or improved means.
 Enlarge or change the local area of its operation.
 Sell or dispose of the whole or any part of its undertaking.
 Restrict or abandon any of the objects specified in the objects clause.
 Amalgamate with any other company or body of persons.
iii) A company may alter the capital clause of its memorandum to:
Reduce its capital pursuant to section 68 (1) of the act.
 Increase its capital pursuant to sections 63 (1) and 65 of the act.
 Convert shares to stock.
 Reconvert any stock to shares.
 Consolidate shares.
 Sub-divide shares.
 Diminish capital.

Leave a Reply

Your email address will not be published. Required fields are marked *