Section 17 - Special resolution and confirmation by Central Government required for alteration of memorandum. - Companies Act, 1956

Special resolution and confirmation by Central Government required for alteration of memorandum. [1] [17. (1) A company may, by special resolution, alter the provisions of its memorandum so as to change the place of its registered office from one State to another, or with respect to the objects of the company so far as may be required to enable it ___ (a) to carry on its business more economically or more efficiently; or (b) to attain its main purpose by new or improved means; or (c) to enlarge or change the local area of its operations; or (d) to carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company; or (e) to restrict or abandon any of the objects specified in the memorandum; or (f) to sell or dispose of the whole or any part of the undertaking or of any of the undertakings, of the company; or (g) to amalgamate with any other company or body of persons. (2) The alteration of the provisions of memorandum relating to the change of the place of its registered office from one State to another shall not take effect unless it is confirmed by the Central Government on petition. (3) Before confirming the alteration, the Central Government must be satisfied (a) that sufficient notice has been given to every holder of the debentures of the company, and to every other person or class of persons whose interests will, in the opinion of the Central Government, be affected by the alteration; and (b) that, with respect to every creditor who, in the opinion of the Central Government, is entitled to object to the alteration, and who signifies his objection in the manner directed by the Central Government, either his consent to the alteration has been obtained or his debt or claim has been discharged or has been determined, or has been secured: Provided that the Central Government may, in the case of any person or class of persons, for special reasons, dispense with the notice required by clause (a). (4) The Central Government shall cause notice of the petition for confirmation of the alteration to be served on the Registrar who shall also be given a reasonable opportunity of appearing before the Central Government and state his objections and suggestions, if any, with respect to the confirmation of the alteration. (5) The Central Government may make an order confirming the alteration on such terms and conditions, if any, as it thinks fit, and make such order as to costs as it thinks proper. (6) The Central Government shall, in exercising its powers under this section, have regard to the rights and interests of the members of the company and of every class of them, as well as to the rights and interests of the creditors of the company and of every class of them. (7) The Central Government may, if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the Central Government for the purchase of the interests of dissentient members; and may give such directions and make such orders as it thinks fit for facilitating, or carrying into effect, any such arrangement: Provided that no part of the capital of the company may be expended for any such purchase.] ---------------------------- Notes:- [1] Substituted by the Companies (Second Amendment) Act, 2002. Prior to substitution it read as under: "17. Special resolution and confirmation by 1 [Company Law Board] required for alteration of memorandum. (1) A company may, by special resolution, alter the provisions of its memorandum so as to change the place of its registered office from one State to another, or with respect to the objects of the company so far as may be required to enable it (a) to carry on its business more economically or more efficiently; (b) to attain its main purpose by new or improved means; (c) to enlarge or change the local area of its operations; (d) to carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company; (e) to restrict or abandon any of the objects specified in the memorandum; (f) to sell or dispose of the whole, or any part, of the undertaking, or of any of the undertakings, of the company; or (g) to amalgamate with any other company or body of persons. 2 [(2) The alteration of the provisions of memorandum relating to the change of the place of its registered office from one State to another shall not take effect unless it is confirmed by the Company Law Board on petition.] (3) Before confirming the alteration, the 3 [Company Law Board] must be satisfied (a) that sufficient notice has been given to every holder of the debentures of the company, and to every other person or class of persons whose interests will, in the opinion of the 4 [Company Law Board], be affected by the alteration; and (b) that, with respect to every creditor who, in the opinion of the 5 [Company Law Board], is entitled to object to the alteration, and who signifies his objection in the manner directed by the 6 [Company Law Board], either his consent to the alteration has been obtained or his debt or claim has been discharged or has determined, or has been secured to the satisfaction of the 7 [Company Law Board]: Provided that the 8 [Company Law Board] may, in the case of any person or class of persons, for special reasons, dispense with the notice required by clause (a). 9 [(4) The 10 [Company Law Board] shall cause notice of the petition for confirmation of the alteration to be served on the Registrar who shall also be given a reasonable opportunity to appear before the 11 [Company Law Board] and state his objections and suggestions, if any, with respect to the confirmation of the alteration.] (5) The 1 [Company Law Board] may make an order confirming the alteration 12 [* * *] on such terms and conditions, if any, as it thinks fit, and may make such order as to costs as it thinks proper. (6) The 13 [Company Law Board] shall, in exercising its powers under this section, have regard to the rights and interests of the members of the company and of every class of them, as well as to the rights and interests of the creditors of the company and of every class of them. (7) The 14 [Company Law Board] may, if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the 15 [Company Law Board] for the purchase of the interests of dissentient members; and may give such directions and make such orders as it thinks fit for facilitating, or carrying into effect, any such arrangement: Provided that no part of the capital of the company may be expended in any such purchase." -------------------------- Notes:- [1] Substituted by Act 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975. [2] 2 Substituted by the Companies (Amendment) Act, 1996, w.e.f. 1-3-1997, for the following: "(2) The alteration shall not take effect until, and except, in so far as, it is confirmed by the Company Law Board on petition." [3] Substituted by the Companies (Amendment) Act, Act 1974 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975. [4] Substituted by the Companies (Amendment) Act, 1974 Act 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975. [5] Substituted by the Companies (Amendment) Act, 1974 Act 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975. [6] Substituted by the Companies (Amendment) Act, 1974 Act 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975. [7] Substituted by the Companies (Amendment) Act, 1974 Act 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975. [8] Substituted by the Companies (Amendment) Act, 1974 Act 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975. [9] Substituted by the Companies (Amendment) Act, 1960 Act 65 of 1960, section 6. [10] Substituted by the Companies (Amendment) Act, 1974, Act 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975. [11] Substituted by the Companies (Amendment) Act, 1974 Act 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975. [12] The words "either wholly or in part, and" omitted by the Companies (Amendment) Act, 1996, w.e.f. 1-3-1997. [13] Substituted by the Companies (Amendment) Act, 1974 Act 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975. [14] Substituted by the Companies (Amendment) Act, 1974 Act 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975. [15] Substituted by the Companies (Amendment) Act, 1974 Act 41 of 1974, section 5, for "Court", w.e.f. 1-2-1975.