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Microlesson · 5-min read

Articles of Association and Entrenchment Provisions

## Articles of Association (AOA)

The AOA contains the regulations for the internal management of the company. The AOA referred to in the Act means the AOA as originally framed or as altered under previous company law or this Act.

A company may include additional matters in its AOA, the most important of which is Entrenchment Provisions.

### Entrenchment of AOA

What is entrenchment?

Entrenchment makes altering certain AOA provisions more difficult than the ordinary route (a special resolution). It imposes stringent conditions — for example, requiring 100% consent or some other higher threshold — to protect specified provisions from being amended easily.

### Manner of Inclusion of Entrenchment Provisions

Entrenchment provisions may be included:

1. On formation of the company, OR

2. By amendment later, agreed to by:

  • All members in the case of a private company, OR
  • A Special Resolution (SR) in the case of a public company.

### Notice to ROC

The company shall notify the Registrar of Companies (ROC):

  • In SPICe+ (INC-32) if introduced at the time of formation.
  • In Form MGT-14 within 30 days after entrenchment for existing companies.

### Forms of Articles (Schedule I — Tables F to J)

TableType of Company
FCompany limited by shares
GCompany limited by guarantee and having share capital
HCompany limited by guarantee and not having share capital
IUnlimited company having share capital
JUnlimited company not having share capital

A company may adopt all or any of the regulations contained in the model articles applicable to it.

Worked example

### Example 1

Example 1: A private company wants to insert an entrenchment provision after incorporation requiring 100% consent to alter Article 50 (which deals with appointment of MD). What is the requirement? Answer: Since it is a private company, the consent of ALL members is required (not merely a SR). Then file Form MGT-14 within 30 days.

### Example 2

Example 2: A public company XYZ Ltd. inserted entrenchment at incorporation. Which form notifies the ROC? Answer: SPICe+ (INC-32) at the time of formation.

⚠️ Common exam mistakes

  • Treating entrenchment requirements the same for private and public companies — they differ (all members vs SR).
  • Filing MGT-14 even when entrenchment was included at incorporation — at incorporation, SPICe+ (INC-32) is used.
  • Mixing up AOA tables (F-J) with MOA tables (A-E).
Reference: Section 5 — Companies Act, 2013
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