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89 General provisions as to alteration of memorandum

General provisions as to alteration of memorandum

Section 21 of the Act provides the general provisions as to the alteration of a memorandum.

The Act states that the memorandum of a company may be altered to the extent and in the manner provided by this Act but not otherwise as mentioned in subsection 21(1).

Subsection (1A) of the Act further adds that notwithstanding subsection (1) and subject to Section 33 and Section 181, if a provision of the memorandum of a company could lawfully have been contained in the articles of the company, the company may, by special resolution, alter the memorandum –

(a) by altering; or

(b) by deleting, the provision, unless the memorandum itself prohibits the alteration or deletion of that provision.

Subsection (1B) of the Act adds that nothing in subsection (1A) permits the alteration or deletion of a provision of the memorandum that relates to rights to which only members included in a particular class of members are entitled.

Subsection 21(2) of the Act provides that in addition to observing and subject to any other provision of this Act requiring the lodging with the Registrar of any resolution of a company or order of the Court or other document affecting the memorandum of a company, the company shall within fourteen days after the passing of any such resolution or the making of any such order lodge with the Registrar a copy of the resolution or other document or an office copy of the order together with (unless the Registrar dispenses therewith) a printed copy of the memorandum as altered, and if default is made in complying with this subsection the company and every officer of the company who is in default shall be guilty of an offence against this Act.

The penalty for an offence under this section of the Act is one thousand ringgit in default penalty.

Figure 2.3 Sections of the Act that permit alteration of the Memorandum of Association

 

Registrar shall register every resolution, order and document lodged

Section 21(3) of the Act provides that the Registrar shall register every resolution, order or other document lodged with him under this Act that effects the memorandum of a company and, where an order is so registered shall certify the registration of that order.

 

Activity 2.3
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Certificate of the Registrar shall be conclusive evidence

Section 21(4) states that the certificate of the Registrar shall be conclusive evidence that all the requirements of the Act with respect to the alteration and any confirmation thereof have been complied with.

 

Notice of registration shall be published

Section 21(5) provides that notice of the registration shall be published in such manner, if any, as the Court or the Registrar directs.

 

Registrar shall issue a certificate of incorporation

In Section 21(6), the Registrar shall, where appropriate, issue a certificate of incorporation in accordance with the alteration made to the memorandum.

 

Power of company to alter its share capital

In addition to the above, Section 62 provides for a company to alter the conditions of its memorandum of association. There are more than one way to alter the memorandum of association and these are summarised as follows:

1. Increase share capital by creation of new shares

2. Consolidate and divide all or any of its share capital into shares of larger amount

3. Convert all or any of its paid-up shares into stock and reconvert that stock into paid-up shares of any denomination

4. Subdivide its shares or any of them into share of smaller amount than is fixed by the memorandum

5. 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 and diminish the amount of its share capital by the amount of the shares so cancelled.

The alteration is sanctioned by a company if it is so authorised by its articles and may be in general meeting.

 

Activity 2.4
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General provisions as to alteration of memorandum Copyright © 2011 by Wawasan Open University. All Rights Reserved.

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