Change in Object Clause
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Overview of Object Clause
A detailed list of activities to be performed by the Company after it is incorporated is mentioned in Object Clause of Memorandum of Association. Activities to be performed by the Company included in the object clause consist of two parts:
- Main Activity, and
- Activities ancillary to main business
The Company is prohibited from carrying on the business outside the scope of its objects. In this article, we are going to discuss the object clause and the procedure for its amendment to conduct the business other than the mentioned objects in its MOA.
Reasons to Amend Object Clause
The following can be the various reasons for which Company alter its object clause, which may or may not be the same:
- The Company may want to carry on its business on a larger scale by enhancing the scope of its activities.
- To attain the goals already set by the Company by new or improved methods.
- To carry on such additional business that can easily be combined with the existing business of the Company.
- To sell or dispose of the part of the business which can alter the structure of the business.
- In case the Company is getting amalgamated or combined with other companies, it needs to expand its existing objective.
The Process to Amend Object Clause of Company’s MOA
In case the Company wants to carry on the business which is not mentioned in its object clause shall first get it amended to add the additional objects following the secretarial procedure:
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Hold The Board Meeting
Send the notice of 7 days to hold the Board Meeting to discuss the following agenda:
• Take the approval of directors to amend the object clause of Memorandum.
• Fix the date, time and venue to call the Extra-Ordinary General Meeting to get an approval of shareholders for change in object clause.
• Approve the notice of EGM along with agenda to be discussed and an explanatory statement as per section 102 of Companies Act 2013.
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Conduct EGM
Take the approval of shareholders by a special resolution passed in duly conducted EGM. Such resolution shall be passed by the three-fourth of the majority. In the case of listed companies after passing the resolution, the Company shall send a copy of the resolution and its preceding details to the stock exchange where its shares are listed. Special Resolution shall be passed by Postal Ballot in following cases of companies:
• A company with more than 200 members.
• A Company has such money which remains unutilized that was raised through the issue of prospectus.
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ROC Filling
After passing the Special Resolution, Company has to file the resolution passed for alternating object clause in MOA with concerned Registrar in from MGT-14along with prescribed fee within 3o days of passing such resolution. Following attachments shall be annexed with the form:
• Notice of EGM
• CTC of Special Resolution
• Altered MOA
• CTC of Board resolution passed
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Approval By ROC
On receipt of the application, Registrar shall scrutinize the same. Upon satisfaction of the correctness of an application, it shall approve the alteration and certify the registration within 30 days of filing a Special resolution.
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