Priya Ltd. has passed a resolution in the general meeting of the company for alteration of articles of association, thereby adopting new set of articles of association by following the statutory procedure in accordance w

Section 14 of the Companies Act, 2013 lays down that subject to the provisions of the Act and to the conditions contained in its memorandum, a company may, by a special resolution, alter its articles. Every alteration shall be filed with the Registrar together with a printed copy of the altered articles within a period of 15 days. [Section 14(2)]. Any alteration of the articles so registered, shall be valid as if it were originally in the articles. A company may alter its articles in accordance with the above provisions in any of the manners mentioned below: By adoption of new set of articles, By addition/insertion of an article; By amendment of a specific article; or By substitution of a specific article Implications of adoption of new articles of association: In terms of section 14(3), any alteration of the articles registered with Registrar shall be valid as if it were originally in the articles. All members of the company become bound by a valid alteration whether they voted for or against it. (Hari Chandana Yoga Devav. Hindustan Co-op Insurance Society Ltd. AIR 1925 Cal. 690.) A provision of the Articles which has the effect of limiting the company's share capital to a fixed amount would have no effect being contrary to the Act. [Muheer Hemant Mafatlalv. Mafatlal Industries Ltd. (1987) 89 Bom LR 86 (Bom)]. Power of alteration can be exercised only in good faith in the interest of the company as a whole. A discriminatory amendment depriving some members of their rights qua members would be struck down as invalid.[Tapas Sinha Roy v. Linkman Services P. Ltd. (2007) 77 CLA 340 (CLB)]