Q.What is meant by alteration of the Articles of Association, and by what resolution is it effected?

A company's Articles are not frozen at incorporation — the Companies Act, 2013 allows them to be changed as the company's needs evolve, but only through a defined procedure.

Alteration of the Articles refers to any change a company makes to its existing Articles — amending an existing clause, adding a new one, or deleting one that no longer serves the company — carried out through the procedure the Companies Act, 2013 lays down for the purpose. Section 14(1) provides that, subject to the provisions of the Act and the conditions contained in its Memorandum, a company may, by a special resolution, alter its Articles, including alterations having the effect of converting a private company into a public company or a public company into a private company.

The requirement of a special resolution, rather than an ordinary resolution, is deliberate: Section 114(2) defines a special resolution as one where the votes cast in favour are not less than three times the votes cast against it, and where the notice of the meeting specifically stated the intention to propose the resolution as a special resolution. This higher threshold reflects the seriousness of altering a document that binds the company and every member as a statutory contract under Section 10 — a bare simple majority is not treated as sufficient consensus to change the company's own internal rulebook. …

Students often say alteration needs only an ordinary resolution, confusing it with a simpler internal Board decision — Se …