Page 230 - DMGT407Corporate and Business Laws

Unit 9: Memorandum of Association

2. to consolidate and divide all or any of its share capital into shares of larger amount than Notes
its existing shares;
3. to convert all or any of its fully paid-up shares into stock and reconvert the stock into fully
paid-up shares of any denomination;
4. to sub-divide its shares, or any of them, into shares of smaller amount than fixed by the
memorandum, but the proportion paid and unpaid on each share must remain the same;
5. to cancel shares which, at the date of the passing of the resolution in that behalf, have not
been taken or agreed to be taken by any person.

Task A company is engaged in jute business. The members unanimously pass a resolution
to start business in rubber. The proposed alteration in the objects clause is submitted to the
Company Law Board for its approval. Advise the Board if the same could be approved or
not.

Self Assessment

State whether the following statements are true or false:
8. The shifting of the registered office from one State to another can be done, by an ordinary
resolution in which no confirmation is required by the Central Government.

9. The liability of a member of a company cannot be increased unless the member agrees in
writing.
10. A company can alter its object clause in order to carry on its business more economically
and more efficiently.
11. Alteration of memorandum do not allow change of registered office from one premises to
another premises in the same city.

Case Study TCI goes for Diversification

he board of directors of Transport Corporation of India Ltd (TCI) has approved a
resolution to enable the company diversify into power production and distribution
Tbusiness.
The company plans to generate power by conventional, non-conventional, thermal, solar,
hydel, geo-hydel, wind and/or tidal waves. Towards this, TCI proposes to enter into joint
venture agreements with either Indian or foreign players.
However, since the existing memorandum of association of the company does not contain
these activities, the TCI board has decided to seek approvals of its shareholders to amend
the main objects clause of the memorandum of association.

Accordingly, the company has decided to go in for postal ballot, wherein the duly-filled
ballot forms would have to reach the scrutiniser appointed by the company by May 29.
In a notice to the shareholders, TCI said the scrutiniser would complete the scrutiny
process and announce the results by June 5.
Source: thehindubusinessline.com

LOVELY PROFESSIONAL UNIVERSITY 223