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Procedure for Change in object Clause of the Company

Narendra Kumar

| Updated: Sep 28, 2017 | Category: Business Registrations

Clause

The Memorandum of Association (MOA) of the Company consist the clauses like name Clause, Objective Clause, Registered office Clause, Liability Clause, Share Capital Clause.

After the incorporation, the company can alter any of the clauses of Memorandum of Association at any time for whatsoever reason.

Section 13 of the Companies Act, 2013 deals with the alteration of Memorandum of Association of the Company. In this article, we will look into the procedure for change in object clause of the Company.

What is the Object Clause of the Memorandum of the Company?

The object clause defines the main business activity of the Company. The detailed information list of activities the Company is going to pursue after its incorporation. The object clause can be bifurcated into a two-part main object and ancillary object. The ancillary object shall help in the conduct of the Main Objects of the Company or are necessary for the conduct of the main objects.

What is the procedure for change in Object Clause of MOA?

Below is the procedure to be followed for change in object clause:

Hold Board Meeting:

  • The first step is to take approval of Board of Directors.
  • To convene Board Meeting seven days prior notice should be given to the all Board of Directors and others who are entitled to receive notice.
  • Board of Directors shall give its approval by passing Board Resolution for proposed amendments to the object clause of Memorandum of association. Which shall be subject to the approval of Shareholders.
  • The board shall delegate one Director of the Company to sign, certify and file the requisite forms with Registrar of Companies and to do all such acts and deeds required to give effect to the proposed alteration.
  • The Board shall fix the date, time, and venue for holding the general meeting of the Company to take shareholders’ approval.
  • The draft notice of the general meeting along with explanatory statement shall be approved by the Board of Directors.
  • Company Secretary and Director shall be authorized to sign and circulate the notice of General Meeting.

The following additional requirement while altering the objects clause of Memorandum of Association of the Company to be followed by the Company if the company has raised money from the public through the prospectus and has any unutilized amount out of the money so raised:

  • Pass special resolution to alter object clause of MOA through postal ballot.
  • Notice of the Meeting shall contain the following:
  • Money received and utilized
  • Unutilised Money
  • Particulars of proposed alteration/ change in the objects
  • Reasons for alteration/change
  • Amount to be utilized in new object
  • Estimated financial impact of the alteration on the earnings and cash flow of the company
  • Publish an advertisement in one English and One Vernacular language.
  • Give an opportunity to the dissenting shareholders to exit by the promoters and shareholders having control in accordance with regulations to be specified by the Securities and Exchange Board.

Hold General Meeting:

After taking duly approval from Board of Directors, now take an approval from shareholder by passing Special Resolution at General Meeting of the Company.

For following classes of the Companies shall pass a Special resolution by Postal Ballot only:

  • Companies those who having more than 200 Members; and
  • A company who have the unutilized money raised through the prospectus.

ROC Forms:

The company shall file MGT-14 within 30 days from the Meeting along with the following attachments:

  • Certified true Copy of special resolution along with the explanatory statement
  • Notice of the Meeting
  • Copy of altered Memorandum of Association.

Approval from ROC:

On satisfaction of application ROC shall register the alteration and certify the registration within a period of 30 days from the date of filing of the special resolution.

After alteration, the company shall note such alteration in every copy of Memorandum of Association.

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Narendra Kumar

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