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How to change the object clause of the company?

Introduction

The object clause of the company states the purpose for which the company is incorporated. It is one of the most important clauses mentioned in the Memorandum of Association (MOA) of the company as it states the extent of a company beyond which a company cannot work. Doing any act not covered in the object clause is an absolute ultra vires act which means the act performed beyond the limit of the object clause of the company. Also, the object clause elaborates the company’s scope of activity and explains how the capital will be utilized in the company, allowing the shareholders the safety of the funds’ utilization.

Object clause covers two aspects:

One, the main business activity of the company
Two, the secondary necessary activities for conducting the main business activity.

There may come a time when you think to expand the business activities and operations and for that reason, alteration is necessary in the object clause of the company.

Now you must be thinking how to change the object clause of the company. Read the article to get the desired information required by you.

Procedure for changing the object clause of a Company

Step 1: Passing the board resolution

The company is required to pass a resolution in the board meeting of the company where the change in the object clause shall be discussed. A director or a CS (Company Secretary) will be there to sign, verify and fill the required documents regarding the change.

Step 2: Special resolution in the extra-ordinary meeting

In the company, members shall pass a special resolution to alter the object clause of the Memorandum of Association (IF a company has received any funds from the public, then disclosure is to be given. And that resolution will be published in the newspaper as required one in vernacular language and one in English. The resolution is then required to be uploaded on the website of company.

Step 3: Filing of Form MGT-14

The appointed person or the Company Secretary will be filing the Form MGT-14 with ROC (Registrar of Companies). Form MGT-14 is filed along with the documents mentioned below:-

  • Certified copy of SR (Special Resolution)
  • Notice of EGM (Extra-Ordinary General Meeting)
  • Explanatory Statement
  • Altered Memorandum of Association (MOA)

Step 4: Issuance of new Certificate of Incorporation

After the MGT-14 form has been filed with ROC, examination and verification of documents will be done by the department and if the department is satisfied then the change in the object clause will be registered and a new certificate of incorporation is issued.

The change of object clause is incomplete without the issuance of a new Certificate of Incorporation (COI).

Step 5: Incorporating clause in the MOA and AOA

Now, once the new certificate of incorporation is received by the company, the last step is updating the change in the Memorandum and Article of Association of the Company. As MOA and AOA are the charter documents of the company as they must be up-to-date whenever there appears any change in the company.

That was all the necessary procedure that was required to be known by you for making change in the object clause of your company.

To know about the name change procedure of the company. Check: http://ez6.b7c.mywebsitetransfer.com/how-to-change-name-of-the-company/

For any professional guidance or company registration related queries
Consult EAdvisors.
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