# Alteration of Articles (AOA) — Sections 5 & 14

## General Rule

A company can alter its AOA by Special Resolution and file it with ROC.
Section 8 company: prior permission of CG (power delegated to ROC) is also required.

## Provision for Entrenchment [Section 5]

Entrenchment provisions are conditions that make alteration of specified AOA provisions more restrictive and harder than passing a Special Resolution (e.g., requiring 95% consent, unanimous approval, etc.).

### Two ways to introduce entrenchment

At Formation of Company	By Subsequent Amendment in AOA
Notice to ROC in SPICe+ (INC-32) at the time of incorporation	• Private company: consent of all members<br>• Public company: by Special Resolution<br>Notice to ROC in Form MGT-14 within 30 days

## Conversion from One Class to Another

### Private → Public Company

If after alteration of AOA, the AOA no longer contains the restrictions required to be a private company, it ceases to be a private company and is deemed a public company.
Only SR is required.

### Public → Private Company

Alteration must be approved by CG (power delegated to Regional Director) within 60 days of passing SR.
SR must be filed with the RD in e-Form RD-1 along with:
Copy of Board Resolution / power of attorney authorising a person to file the application.
Copy of minutes of meeting where SR was passed (with details of votes and names of dissenters).
Declaration by KMP regarding compliance.
Draft copy of MOA & AOA (with alterations).

## Filing & Effect

Altered AOA, CG approval (if applicable) and copy of altered AOA shall be filed with ROC in Form INC-27 within 15 days of alteration.
ROC shall register the same.
Alteration so registered shall be valid as if it was originally contained in the AOA.

Worked example

### Example 1

Q: While drafting the AOA of Shyam Pvt. Ltd., Shyamlal is named as director for life. He fears this provision could be removed by a future SR. What can he do?

A: He can include an entrenchment provision in the AOA requiring (say) unanimous consent of all members to alter that clause. As a private company, this entrenchment requires consent of all members (or at formation, simply notice to ROC in SPICe+). Once entrenched, the lifetime-director provision cannot be changed by mere SR.

### Example 2

Q: Sunrise Public Ltd. wants to convert to a private company. List the regulatory approvals needed.

1. Pass Special Resolution.

2. Apply to Regional Director in e-Form RD-1 within 60 days of SR, attaching BR, minutes (with dissenters), KMP compliance declaration, and altered MOA/AOA.

3. Obtain RD's approval.

4. File altered AOA + RD approval with ROC in Form INC-27 within 15 days.

⚠️ Common exam mistakes

Saying CG approval is needed for Private → Public conversion — only SR is required.
Confusing forms — SPICe+ (INC-32) for entrenchment at formation; MGT-14 for later amendment; RD-1 for public→private conversion; INC-27 for filing altered AOA.
Treating entrenchment as a way to make alteration easier — it makes alteration harder, never easier.
Stating that a public company can adopt entrenchment merely by majority — it needs Special Resolution; private company needs consent of all members.

Bare-Act text Section 5(3) & 14 · Companies Act, 2013 · click to expand

The articles may contain provisions for entrenchment to the effect that specified provisions of the articles may be altered only if conditions or procedures as that are more restrictive than those applicable in the case of a special resolution, are met or complied with.

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Alteration of Articles (AOA) and Entrenchment [Section 5 & 14]

Worked example

⚠️ Common exam mistakes