Section 38 - Effect of alteration in memorandum or articles. - Companies Act, 1956

Effect of alteration in memorandum or articles. 38. Notwithstanding anything in the memorandum or articles of a company, no member of the company shall be bound by an alteration made in the memorandum or articles after the date on which he became a member, if and so far as the alteration requires him to take or subscribe for more shares than the number held by him at the date on which the alteration is made, or in any way increases his liability as at that date, to contribute to the share capital of, or otherwise to pay money to, the company: [1] [ Provided that this section shall not apply ____ (a) in any case where the member agrees in writing either before or after a particular alteration is made, to be bound by the alteration; or (b) in any case where the company is a club or the company is any other association and the alteration requires the member to pay recurring or periodical subscriptions or charges at a higher rate although he does not agree in writing to be bound by the alteration.] --------------------------------- Notes:- [1] Substituted by the Companies (Amendment) Act, 1960, 65 of 1960, section 12, for the proviso.