What Is Alteration of the Memorandum? Section 13

Alteration of the memorandum under section 13 is how a company changes the document that defines it: its name, its objects, or the State its registered office sits in. A special resolution starts the process, but section 13(10) is the sentence that governs everything else: no alteration has any effect until it has been registered.

What alteration of memorandum section 13 requires

Section 13(1) sets the base rule: save as provided in section 61, a company may, by a special resolution and after complying with the procedure specified in the section, alter the provisions of its memorandum. Section 61 carries its own machinery for altering the capital clause, and section 13(1) opens by excepting it.

Beyond that, section 13 sets different requirements for different clauses of the memorandum:

A proviso to section 13(2) removes the Central Government from the name route in one case: no approval is necessary where the only change is the deletion or addition of the word "Private", consequent on the conversion of one class of company to another under the Act.

When a name change actually happens

Section 13(3) is precise about the moment. When a change of name is made under sub-section (2), the Registrar shall enter the new name in the register of companies in place of the old name and issue a fresh certificate of incorporation with the new name, and the change in the name shall be complete and effective only on the issue of such a certificate.

For anyone tracking a company through a rename, that is the date to use. Not the date of the special resolution, and not the date the Central Government approved it.

Moving between States, and what creditors get

Section 13(4) provides that an alteration of the memorandum relating to the place of the registered office from one State to another shall not have any effect unless it is approved by the Central Government on an application in the prescribed form and manner.

Section 13(5) then gives the Central Government sixty days to dispose of that application, and sets out what it may satisfy itself about before passing its order:

• that the alteration has the consent of the creditors, debenture-holders and other persons concerned with the company; or
• that sufficient provision has been made by the company for the due discharge of all its debts and obligations; or
• that adequate security has been provided for such discharge

Section 13(7) handles the filing on both sides of a State move. Where an alteration results in the transfer of the registered office from one State to another, a certified copy of the Central Government's order shall be filed by the company with the Registrar of each of the States, who shall register it, and the Registrar of the State the office is being shifted to shall issue a fresh certificate of incorporation indicating the alteration.

Compare this with the smaller moves in what is a registered office: a move inside the same city needs only notice, a move outside those limits needs a special resolution, and a move between Registrars within one State needs the Regional Director. Only the State change reaches the Central Government and the memorandum itself.

The objects clause, and the exit for dissenters

Section 13(8) is the provision with the most direct consequence for a public shareholder. A company which has raised money from the public through a prospectus and still has any unutilised amount out of the money so raised shall not change its objects for which it raised that money unless a special resolution is passed and two further conditions are met:

• (i) The prescribed details of the resolution are published in the newspapers, one in English and one in the vernacular language in circulation at the place where the registered office is situated, and placed on the website of the company, if any, indicating the justification for the change.
• (ii) The dissenting shareholders shall be given an opportunity to exit by the promoters and shareholders having control, in accordance with regulations to be specified by the Securities and Exchange Board.

That second limb is the bridge from company law to securities regulation. The Act creates the right and leaves the mechanics of the exit offer to SEBI.

Section 13(9) sets the Registrar's timeline for this route specifically: he shall register any alteration of the memorandum with respect to the objects and certify the registration within thirty days from the date of filing of the special resolution under section 13(6)(a).

Filing and effect

Section 13(6) lists what goes to the Registrar. Save as provided in section 64, a company shall, in relation to any alteration of its memorandum, file:

• (a) the special resolution passed under section 13(1); and
• (b) the approval of the Central Government under section 13(2), if the alteration involves any change in the name of the company

Section 13(10) then supplies the general rule that makes registration the operative step: no alteration made under this section shall have any effect until it has been registered in accordance with the provisions of the section.

Section 13(11) closes with a specific prohibition for one type of company. Any alteration of the memorandum of a company limited by guarantee and not having a share capital, purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member, shall be void.

Where this sits in the disclosure picture

A rename, a change of objects or a State move each leave a trail at the Registrar and, for a listed company, at the exchanges as well. The objects change is the one that carries a shareholder right attached to it.

• What is alteration of the articles covers the parallel section 14 route for the company's other constitutional document.
• What is a registered office covers the section 12 moves that stop short of a change of State.
• What is in the annual return covers the return whose clause (a) states the registered office as it stood at the financial year's close.
• What is material event disclosure covers the SEBI-side obligation that puts changes like these in front of the market.

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.