The Articles of Association may contain provisions for entrenchment to the effect that specified provisions of the articles may be altered only if conditions or procedures as that are more restrictive than those applicable in the case of a special resolution, are met or complied with. [Section 5(3)]
- Section 5, & 173 of Companies Act, 2013
- Regulation 29, 30, 44 and 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
The provisions for entrenchment shall only be made
- either on formation of a company in Form SPICe 32, or
- by an amendment in the articles agreed to by all the members of the Company in the case of a Private Company and by a special resolution in the case of a Public Company. [Section 5(4)]
Following Procedure is to be followed
- Convene a Meeting of Board of Directors [As per section 173 & SS-1]
- Issue Notice of Board Meeting to all the Directors of Company at their addresses registered with the Company, at least 7 days before the date of Board Meeting. A shorter notice can be issued in case of urgent business.
- Attach Agenda, Notes to Agenda and Draft Resolution with the Notice.
- Hold a meeting of Board of Directors of the Company and pass the necessary Board Resolution
- to consider the articles in AOA that is to be entrenched.
- to fix day, date, time and venue for holding General Meeting of the Company.
- to approve the draft notice of General Meeting along with explanatory statement annexed to the notice as per requirement of the Section 102 of the Companies Act, 2013.
- to authorize the Director or Company Secretary to sign and issue notice of the General Meeting and to do such acts, deeds and things as may be necessary to give effect to the Board’s decision.
- to delegate authority to Company Secretary or any one director of the company to sign, certify and file the required form with Registrar of Companies and to do all such acts and deeds as may be necessary to give effect to the Board’s decision.
Listed Company shall submit the disclosure of Board Meeting as soon as reasonably possible and but not later than the following:
- thirty minutes from the closure of the meeting of the board of directors in which the decision pertaining to the event or information has been taken
- twelve hours from the occurrence of the event or information, in case the event or information is emanating from within the listed entity
- twenty four hours from the occurrence of the event or information, in case the event or information is not emanating from within the listed entity, from the end of the Board Meeting and post the same on the website of the Company within 2 working days. [Regulation 30 & 46(3) of the SEBI (LODR) Regulations, 2015]
- Prepare and Circulate Draft Minutes within 15 days from the conclusion of the Board Meeting, by Hand/Speed Post/Registered Post/Courier/E-mail to all the Directors for their comments. [Refer the Procedure for Preparation and Signing of Minutes of Board Meeting]
- Convene General Meeting [Section 96, 100 and SS-2]
- Notice of General Meeting shall be given at least clear 21 days before the actual date of a General Meeting in writing, by hand or by ordinary post or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means or a Shorter Notice can be issued with the consent of at least majority in number and ninety five percent of such part of the paid up share capital of the company giving a right to vote at such a meeting in accordance with Section 101.
- Notice will be sent to all the Directors, Members, Auditors of Company, Secretarial Auditor, Debenture Trustees and to others who are entitled to receive the notice of the General Meeting.
- Notice shall specify the day, date, time and full address of the venue of the Meeting and contain a statement on the business to be transacted at the Meeting.
- Hold the General Meeting on fixed day and pass Special Resolution (in case of Public Company) and an unanimous resolution (in case of Private Company) to alter AOA by adding provision for entrenchment of articles.
- Listed Companies shall disclose the proceedings of General Meeting to the Stock Exchange within 24 hours from the conclusion of General Meeting and same shall be posted on the website of the company within 2 working days. [Regulation 30 and 46(3) of the SEBI (LODR) Regulations, 2015]
- Listed Companies shall submit to the stock exchange the details of the voting results within two working days from the conclusion of the meeting and post the same on the website of the Company. [Regulation 44 of the SEBI (LODR) Regulations, 2015]
- Prepare the minutes of General Meeting, get them signed and compile accordingly. [Refer the Procedure for Preparation and Signing of Minutes of General Meeting].
- File Form MGT-14 with ROC
File Form MGT-14 with the ROC within 30 days of passing Special Resolution (in case of Public Company) and Unanimous Resolution (in case of Private Company) in General Meeting along with fee as specified in the Companies (Registration offices and fees) Rules, 2014 and with the following attachments
- Certified True Copies of the Special/Unanimous Resolution passed along with Explanatory Statement.
- Copy of the Notice of meeting sent to members along with all the annexure
- Shorter Notice Consent Letters from the members in case the General Meeting was convened at shorter notice.
- An altered copy of Article of Association
- Copy of Attendance Sheet of General Meeting
- Any other attachment as may be applicable.
- Alteration of Articles to be noted in every copy [Section 15(1)]
Every alteration made in the articles of a company shall be noted in every copy of the articles.