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Microlesson · 5-min read

Overriding Effect of the Companies Act over MOA, AOA & Resolutions

## Overriding Effect of the Companies Act (Section 6)

### Core Rule

The provisions of the Companies Act, 2013 have an overriding effect over the following:

1. MOA of the company

2. AOA of the company

3. Any agreement made by the company

4. Any resolution passed by the company — whether passed before or after the commencement of the Act

### Effect of Conflict

If any provision in the MOA, AOA, agreement, or resolution conflicts with the Act, the conflicting part shall be void.

### Exception — When the Act Itself Permits

The Act overrides unless another section of the Act expressly states otherwise. Where a specific section of the Act gives precedence to the MOA/AOA, that section will be followed.

### Worked Examples from the Act

Example A — Section 123 (Dividend)

  • Section 123 states no dividend can be paid except out of profits.
  • The AOA cannot override this rule. Any AOA clause permitting dividend out of capital is void.

Example B — Section 47 (Voting Rights)

  • Section 47 governs voting rights of members but applies to private companies only if their AOA so provides.
  • A private company whose AOA states Sec 47 does NOT apply → the AOA prevails; Sec 47 is not applicable.

### Why the Distinction Matters

This tells you that not every Act provision is absolute — some are crafted specifically to allow MOA/AOA flexibility (particularly for private companies). Always check whether the section itself carves out an exception.

Worked example

### Example 1

Question: ABC Ltd.'s AOA permits dividend payment out of share capital if profits are inadequate. Is this clause valid? Answer: No. Sec 123 prohibits dividend except out of profits, and Sec 6 makes the conflicting AOA clause void.

### Example 2

Question: A private company's AOA excludes Sec 47 of the Companies Act. Is this excludable? Answer: Yes. Sec 47 specifically applies to private companies only if their AOA permits. The AOA exclusion is valid.

⚠️ Common exam mistakes

  • Assuming the Act always overrides — many sections (especially relating to private companies) expressly allow AOA flexibility.
  • Treating only the conflicting clause as void vs voiding the entire MOA/AOA — only the conflicting part is void.
Bare-Act text Section 6 · Companies Act, 2013 · click to expand
Save as otherwise expressly provided in this Act — (a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained in the memorandum or articles of a company, or in any agreement executed by it, or in any resolution passed by the company in general meeting or by its Board of Directors, whether the same be registered, executed or passed, as the case may be, before or after the commencement of this Act; and (b) any provision contained in the memorandum, articles, agreement or resolution aforesaid shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be.
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