What Is Alteration of the Articles? Section 14
Alteration of the articles under section 14 is the shorter of the Act's two constitutional amendment routes. A special resolution is enough on its own for most changes, with no Registrar confirmation and no Central Government approval, unless the alteration converts a public company into a private one.
Definition
Alteration of the articles
is the process under section 14 of the Companies Act, 2013 by which a company alters its articles by a special resolution, including alterations converting a private company into a public company or the reverse. Converting a public company into a private one also needs a Central Government order. Source: Companies Act, 2013, sections 14(1) and 14(2).
What alteration of articles section 14 permits
Section 14(1) states the power broadly. Subject to the provisions of the Act and the conditions contained in its memorandum, if any, a company may, by a special resolution, alter its articles, including alterations having the effect of conversion of:
- (a) a private company into a public company; or
- (b) a public company into a private company
The word "including" matters. Conversion is not a separate procedure in the Act; it is an alteration of the articles that happens to change the company's class, and it travels through the same section as any other change to the articles.
The two conversions are not treated alike, and that is where the provisos come in.
| Conversion | What it takes |
|---|---|
| Private into public | The special resolution under section 14(1). The first proviso operates automatically: once the articles no longer include the restrictions and limitations required of a private company, the company ceases to be a private company as from the date of that alteration |
| Public into private | The special resolution plus an order of the Central Government approving it, on an application in the prescribed form and manner, under the second proviso |
The first proviso is self-executing and worth reading carefully. It does not say the company may become public; it says it shall cease to be a private company from the date of the alteration. The change of status follows the articles rather than any approval.
15 days
The period within which every alteration of a company's articles must be filed with the Registrar, with a printed copy of the altered articles
Source: Companies Act, 2013, section 14(2)
The approval that moved from the Tribunal
The second proviso to section 14(1) requires that an alteration converting a public company into a private company be approved by an order of the Central Government. That authority is recent: the proviso was substituted by Act 22 of 2019, section 5, with effect from 2 November 2018, and the same amendment substituted "Central Government" for "Tribunal" in section 14(2).
A third proviso handles the changeover. Any application pending before the Tribunal as on the date of commencement of the Companies (Amendment) Act, 2019 shall be disposed of by the Tribunal in accordance with the provisions applicable to it before such commencement.
For anyone reading an older conversion order, that is the reason the deciding authority differs by date: applications made before the changeover stayed with the Tribunal, and everything after it goes to the Central Government.
Filing, and the effect of registration
Section 14(2) sets out what is filed and when. Every alteration of the articles under the section, and a copy of the order of the Central Government approving the alteration where sub-section (1) requires one, shall be filed with the Registrar together with a printed copy of the altered articles, within fifteen days, in the prescribed manner, and the Registrar shall register the same.
Section 14(3) then gives the registered alteration its effect: any alteration of the articles registered under sub-section (2) shall, subject to the provisions of the Act, be valid as if it were originally in the articles.
That retrospective fiction is the difference between the two constitutional documents. Alteration of the memorandum under section 13(10) has no effect at all until registered. An alteration of the articles, once registered, is treated as though it had always been there.
Section 15 applies to both documents. Every alteration made in the memorandum or articles shall be noted in every copy of it, and the company and every officer who is in default are liable to a penalty of one thousand rupees for every copy of the memorandum or articles issued without the alteration.
Section 13 and section 14 compared
| What to check | Memorandum, section 13 | Articles, section 14 |
|---|---|---|
| Resolution | Special resolution, save as provided in section 61 | Special resolution |
| Outside approval | Central Government for a name change and for a State change of registered office | Central Government only for public into private conversion |
| Filing period | No period in section 13(6) itself; the special resolution goes to the Registrar within thirty days under section 117(1). For an objects change the Registrar then registers and certifies within thirty days of that filing, section 13(9) | Fifteen days to file, with a printed copy of the altered articles |
| Effect | No effect until registered, section 13(10) | Once registered, valid as if originally in the articles, section 14(3) |
| Shareholder exit right | Yes, on an objects change where public money is unutilised, section 13(8) | None in the section |
Why a conversion matters to an outside reader
A conversion from public to private, or the reverse, changes which parts of the Act and which securities regulations apply to a company. It is decided by the shareholders in a special resolution and registered at the Registrar, and for a listed company it sits alongside the exchange disclosures that report the same corporate action to the market.
- What is alteration of the memorandum covers the other constitutional document and the exit right attached to an objects change.
- What is a registered office covers the address clause that a memorandum change can move between States.
- What is in the annual return covers the return that reports the company's structure as at the financial year's close.
- What is a postal ballot covers one route by which a special resolution like this can be passed.
Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.
Frequently asked questions
How does a company alter its articles under section 14?
By a special resolution, subject to the provisions of the Act and the conditions contained in its memorandum, if any. The alteration may include one having the effect of converting a private company into a public company or a public company into a private company. Source: Companies Act, 2013, section 14(1).
When must an alteration of articles be filed with the Registrar?
Within fifteen days. Section 14(2) requires every alteration of the articles, and a copy of the Central Government order approving it where applicable, to be filed with the Registrar together with a printed copy of the altered articles, in the prescribed manner, and the Registrar shall register the same. Source: Companies Act, 2013, section 14(2).
Who approves converting a public company into a private company?
The Central Government. The second proviso to section 14(1) provides that an alteration having the effect of converting a public company into a private company is not valid unless approved by an order of the Central Government on an application in the prescribed form. This replaced the Tribunal with effect from 2 November 2018. Source: Companies Act, 2013, second proviso to section 14(1), substituted by Act 22 of 2019, s. 5.
When does a private company stop being private?
Where a private company alters its articles so that they no longer include the restrictions and limitations required to be included in the articles of a private company under the Act, the company ceases to be a private company as from the date of that alteration. Source: Companies Act, 2013, first proviso to section 14(1).
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Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.