Memorandum Alteration explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
One clause of the memorandum can be changed by simple majority. There is a reason it is that one.
The rule
Yes, a company is required to pass a special resolution for altering its MOA except for the alteration of capital clause of memorandum which could be altered by passing ordinary resolution.
The memorandum is the company's founding document. It fixes the name, the state of the registered office, the objects, the liability of members and the capital with which the company is registered. A person who becomes a member does so on the footing of what it says.
Change any of those and the company a member joined is not the company they now hold shares in. A change of objects can move the business into an activity they never agreed to fund. A change to the liability clause alters what they are exposed to. A change of the registered office state moves the company into another jurisdiction and another Registrar.
Hence the special resolution — three-quarters of those voting — for the memorandum generally, and for the inter-state shift the additional requirement under section 13(4) that it shall not have any effect unless it is approved by the Central Government.
The capital clause is different in a specific way. Altering it — typically increasing the authorised capital — does not change any member's rights, the company's objects, or its liability structure. It raises the ceiling on shares the company may issue. Nothing has been issued, nobody has been diluted, and no member's position has moved.
And the acts that would affect members are separately controlled. Actually issuing shares requires a rights offer under section 62(1)(a), or a special resolution for a preferential issue under section 62(1)(c), or the private placement machinery of section 42. The protection sits at the point of issue, where the dilution occurs, not at the point of raising the ceiling.
Requiring a special resolution for both would mean asking the members twice for the same protection — once for permission to be able to issue, and again for the issue itself. The Act asks once, at the stage that matters.
Which resolution
| Clause altered | Resolution | Further approval |
|---|---|---|
| Name | Special | Central Government approval as required |
| Registered office, state to state | Special | Central Government under section 13(4) |
| Objects | Special | Additional conditions where public money was raised |
| Liability | Special | — |
| Capital | Ordinary | Authority in the articles; section 61 |
On the objects clause
As per the Act, the Company may engage in any lawful act or activity for the time being in force. In case, company proposes to pursue any specific objective, MOA shall state the said object for which company is incorporated. Thus, as per the Act, the question on multiple object or varied object would not arise.
This is a real departure from the older practice of drafting an objects clause running to pages, listing every conceivable activity to avoid a transaction being held beyond the company's powers. The doctrine that made that necessary has been substantially diluted, and the clause is now a statement of what the company is for rather than an exhaustive licence.
Common mistakes
- Passing an ordinary resolution for a memorandum alteration other than the capital clause.
- Treating an inter-state shift as effective on the special resolution alone.
- Increasing authorised capital without checking the authority in the articles.
- Drafting an objects clause on the pre-2013 exhaustive model.