Special Resolution Alteration of Liability Clause of Memorandum

In accordance with section 4(1)(d) of the Companies Act, 2013, the memorandum of association of a company shall state whether the liability of members of the company is limited or unlimited and also shall state, in the case of a company limited by shares, that the liability of its members is limited to the amount unpaid, if any, on the shares held by them.

And, as per section 13 of the Act, a company can alter the provisions of its memorandum only after obtaining the approval of the members of the company by passing of a special resolution in their general meeting and after complying with the necessary procedure in this regard.

Templates of such special resolution along with the explanatory statement are as follows—

SAMPLE #1

#. Alteration of the Liability Clause of the Memorandum of Association of the Company

To consider and if thought fit, to pass with or without modification(s), the following as a. Special Resolution:

“RESOLVED THAT pursuant to the provisions of sections 4, 13 and other applicable provisions, if any, of the Companies Act, 2013 and rules framed thereunder, including any modification(s) thereto or re-enactment(s) thereof for the time being in force, the consent of the members of the company be and is hereby accorded for altering Clause IV i.e. the Liability Clause of the Memorandum of Association of the company by substituting the existing Clause IV with the following:

 "IV. The liability of the members is limited and this liability is limited to the amount unpaid, if any, on the shares held by them."

RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to do all such acts and take all such steps as may be necessary, proper or expedient to give effect to the foregoing resolutions.”

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SAMPLE #2

#. Alteration of the Liability Clause of the Memorandum of Association of the Company

To consider and if thought fit, to pass with or without modification(s), the following as a. Special Resolution:

 “Resolved that pursuant to the provisions of Section 4, 13 and all other applicable provisions, if any, of the Companies Act, 2013, read with applicable Rules and Regulations made thereunder, as amended from time to time and subject to such approvals, permissions and sanctions of Registrar of Companies, appropriate authorities, departments or bodies as and to the extent necessary, consent of the members of the company be and is hereby accorded for substitution of Clause IV of the Memorandum of Association of the company with the following clause:

 "IV. The Liability of members is limited and this liability is limited to the amount unpaid, if any, on the shares held by them."

Resolved further that the Board of Directors of the company (hereinafter referred to as the "Board", which term shall deem to include any of its duly constituted Committee) or any officer/executive/representative and/or any other person so authorized by the Board, be hereby authorized to do all such acts, deeds, matters and things that may be deemed necessary, proper, expedient or incidental for the purpose of giving effect to the aforesaid resolution.”

Explanatory Statement - Pursuant to Section 102 of the Companies Act, 2013 ("the Act")

Item No. ...

The Liability Clause of the MOA is being replaced to clarify, that the liability of the members is limited to the amount unpaid on the shares and to make it in conformity with the provisions of the Act.

Both copies of MoA, (1) existing MoA copy, and (2) draft copy of MoA with proposed alterations, referred to in this resolution would be available for inspection by the members, free of cost, at the Registered Office of the company during 11.00 a.m. to 1.00 p.m. on all working days (Monday to Friday).

None of the Directors and/or Key Managerial Personnel of the company and/or their respective relatives are concerned or interested, financially or otherwise in the foregoing resolution except to the extent of their shareholding, if any.

The Board commends the resolution under Item No. ... for approval of the members as a Special Resolution.

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NOTE: The resolution sample(s) here is only for reference, to help you with drafting. Do refer the exact provisions of the Act, relevant rules framed thereunder and any other applicable laws to be able to not to miss out anything important while drafting.