Think of a company's Articles of Association (AoA) as its internal rulebook — who can vote, how meetings are called, how shares are transferred. Life changes, and so must rules. Section 14 tells you how a company can legally rewrite that rulebook.
The golden rule: any alteration to the AoA requires a special resolution (75%+ majority of votes cast). You can't just call a quick board meeting and change things — you need shareholders on board. The alteration can also convert a private company into a public company or vice versa. But here's the twist that the examiner loves: converting a public company into a private company needs Central Government approval (not just a special resolution). So it's a two-step process — pass the special resolution AND apply to the Central Government in the prescribed form.
There's also a sharp automatic rule worth memorising: if a private company removes the restrictions that define it as private (like limits on share transfers or the cap of 200 members), it automatically ceases to be a private company the moment those restrictions are deleted — no further formality needed. Finally, once the alteration is passed, the company must file the altered AoA with the Registrar of Companies (RoC) within 15 days, along with a printed copy of the new articles. Once registered, the altered articles are treated as if they were there from day one. This section is frequently tested as a 4-mark or 6-mark theory/application question — especially the distinction between private-to-public vs. public-to-private conversion.
📊 Worked example
Example 1 — Private to Public Conversion
Question: Sharma Textiles Pvt. Ltd. wants to convert into a public company. It passes a special resolution removing the restriction on share transfers from its AoA. What are the steps and legal effect?
Working:
- Step 1: Pass a special resolution in a General Meeting (≥75% votes in favour).
- Step 2: Since this is private → public, no Central Government approval is required.
- Step 3: File the altered AoA with the RoC within 15 days along with a printed copy.
- Step 4: The moment the restrictions are removed, the company automatically ceases to be a private company under the proviso to Section 14(1).
Final Answer: Sharma Textiles Pvt. Ltd. becomes a public company on the date of alteration itself. Central Government approval is NOT needed here.
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Example 2 — Public to Private Conversion
Question: Iyer Industries Ltd. (a public company) passes a special resolution to convert into a private company by adding restrictions in its AoA. Is the alteration valid immediately?
Working:
- Step 1: Special resolution is passed ✓
- Step 2: BUT — under the second proviso to Section 14(1), this alteration is not valid until the Central Government approves it via a prescribed application.
- Step 3: Only after Central Government order is received does the alteration take effect.
- Step 4: File altered AoA + Central Government order with RoC within 15 days.
Final Answer: The special resolution alone is insufficient. The conversion is invalid until Central Government approval is obtained. Filing fee and RoC filing within 15 days remains mandatory.
⚠️ Common exam mistakes
- Students write that a simple majority (ordinary resolution) is enough to alter AoA — Wrong. Section 14 specifically requires a special resolution (75%+ of votes cast). Always state this explicitly.
- Confusing private-to-public and public-to-private requirements — Don't say both conversions need Central Government approval. Only public → private needs CG approval; private → public does not.
- Forgetting the automatic conversion rule — Many students miss that if a private company removes its defining restrictions, it automatically becomes a public company from that date — no further step is needed. This proviso is a favourite examiner trap.
- Missing the 15-day filing requirement — Students often describe the alteration process correctly but forget to mention that altered articles must be filed with the RoC within 15 days. Incomplete answers lose marks.
- Stating that altered articles apply prospectively — Section 14(3) says registered alterations are valid as if they were originally in the articles (retrospective validity). Don't say the new rules apply only from the date of alteration going forward.
📖 Bare Act text — Section 14, Companies Act 2013
(click to expand)
(1) Subject to the provisions of this 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:Provided that where a company being a private company alters its articles in such a manner that they no longer include the restrictions and limitations which are required to be included in the articles of a private company under this Act, the company shall, as from the date of such alteration, cease to be a private company:Provided further that any alteration having the effect of conversion of a public company into a private company shall not valid unless it its approved by an order of the Central Government on an application made in such form and manner as may be prescribed:Provided also that 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.(2) Every alteration of the articles under this section and a copy of the order of the Central Government approving the alteration as per sub-section (1) shall be filed with the Registrar, together with a printed copy of the altered articles, within a period of fifteen days in such manner as may be prescribed, who shall register the same.(3) Any alteration of the articles registered under sub-section (2) shall, subject to the provisions of this Act, be valid as if it were originally in the articles.
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