## Entrenchment Provisions in AoA

Meaning: Entrenchment provisions are special clauses in the Articles of Association (AoA) that make it more difficult to amend certain provisions than the normal procedure of a Special Resolution (SR) would require. For example, AoA may state that a particular clause can be altered only with unanimous consent of all members.

### When can entrenchment provisions be inserted?

Provisions for entrenchment can be made in only two situations:

1. At the time of formation of the company (filed in SPICe+); OR

2. By amendment to AoA of an existing company, agreed to by:

All members — in case of a private company
Special Resolution — in case of a public company

### Notice to Registrar of Companies (RoC)

Where AoA contains an entrenchment provision, the company must give notice to the RoC:

When entrenchment was inserted	Form to be filed	Time limit
On formation of the company	SPICe+	At incorporation
By amendment to AoA of existing company	MGT-14	Within 30 days of amendment

### Model Articles (Tables F, G, H, I, J in Schedule I)

AoA shall be in respective forms in Tables F, G, H, I and J of Schedule I.
A company may adopt all or any regulations from the applicable model articles.
If the registered AoA does not exclude or modify a regulation in the applicable model AoA, that model regulation is deemed to be a regulation of the company as if contained in its duly registered AoA.

### Schedule I – Quick recall (Tables F to J)

Table	Applicable to
F	Company limited by shares
G	Company limited by guarantee having share capital
H	Company limited by guarantee not having share capital
I	Unlimited company having share capital
J	Unlimited company not having share capital

Worked example

### Example 1

Example: XYZ Pvt. Ltd. wishes to add an entrenchment clause requiring 100% member approval to alter the dividend policy clause in AoA. Since XYZ is a private company, this entrenchment can be added only by agreement of all members. The company must file Form MGT-14 within 30 days of the amendment.

### Example 2

Example: ABC Ltd. (public company) was incorporated with an entrenchment clause requiring 90% members' approval to alter the borrowing-limit clause. Since this entrenchment was made at formation, the company gave notice in the SPICe+ form at the time of incorporation — no separate MGT-14 is required.

⚠️ Common exam mistakes

Confusing the notice form: SPICe+ is used only at formation; MGT-14 is for subsequent insertion by amendment.
Assuming entrenchment requires SR for all companies — for private companies it requires consent of ALL members, not just SR.
Forgetting that if registered AoA is silent on a model regulation, that regulation is deemed to be part of the company's AoA.

Bare-Act text Section 5 · Companies Act, 2013 · click to expand

Section 5(4) & (5): Provisions for entrenchment shall only be made either on formation of a company, or by an amendment in AoA agreed to by all members (in case of private company) or by a special resolution (in case of public company). Where AoA contain provision for entrenchment, company shall give notice to RoC of such provision in SPICe+ (entrenchment on formation) or MGT-14 (within 30 days if such provision made by amendment to AoA of existing company).

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Entrenchment Provisions in Articles of Association (Section 5)

Worked example

⚠️ Common exam mistakes