Change in Object Clause

A change in the object clause of a company refers to an alteration made to the specific activities or objectives for which the company was originally established. This modification typically involves amending the Memorandum of Association, a key legal document that outlines the company's purpose and scope of operations. Reasons for such changes may include adapting to market trends, expanding business activities, or complying with regulatory requirements. However, any alteration must adhere to legal procedures and obtain necessary approvals from relevant authorities to ensure transparency and legality in business operations, a process Easypaytax expertly handles.

What is MOA - Memorandum of Association

The Memorandum of Association (MOA) of any Company is the foundational document upon its incorporation. The MOA serves as the company's constitution, defining the scope of its powers and rights within which it operates. Provisions of Law prevail in case of any conflict between the Companies Act and clauses in the Memorandum.

Objects are the part of the Memorandum that defines the objectives of the Company for which it is being formed. The Company cannot operate beyond its object clause. In any scenario, no company can act against the provisions of its Memorandum, and if it does so, such a transaction will be ultra vires and hence void. In case the Company enters a contract, any arrangement, or agreement with any third party, such Memorandum is used as a public document.

The Memorandum of Association must be prepared as per the format given in Table A-F of Schedule I of the Companies Act 2013. Following Tables are used for different kinds of companies depending upon their status, as Easypaytax can clarify.

 
Table ATable BTable CTable DTable E
MOA of Companies limited by shares.MOA of the Companies limited by guarantee and have no share capital.MOA of the Companies limited by guarantee but have share capital.MOA of the Unlimited Companies.MOA of the Unlimited Companies and having share capital.
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Nidhi com Reg 2

Contents of MOA

The MOA of the Company consists of the following clauses:

Name Clause

  • This is the first clause in every MOA that shall mention the name of the Company with the last word as Private Limited, Limited, OPC Private Limited depending upon the type of Company. Such a requirement need not be fulfilled by a Section 8 Company.

Registered Address Clause

  • It is the clause that mentions the name of the state where the Company's registered office is situated.

Object Clause

  •  It specifies the objects for which the Company is incorporated.

Liability Clause

  •  It specifies the limited or unlimited liability of the members.

Capital Clause

  •  This is the last clause that mentions the Capital of the Company. Authorized Capital divided into such several shares shall be mentioned by the Company under this clause. Authorized Capital is the amount up to which the Company can raise the capital.

What is Object Clause in Memorandum of Association of Company?

A detailed list of activities to be performed by the Company after it is incorporated is mentioned in the Object Clause of the 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 business outside the scope of its objects. In this article, Easypaytax will discuss the object clause and the procedure for its amendment to conduct business other than the mentioned objects in its MOA.

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Proprietorship Registration

The Process to Amend Object Clause of Company’s MOA

In case the Company wants to carry on business, which is not mentioned in its object clause, it shall first get it amended to add the additional objects, following the secretarial procedure that Easypaytax facilitates:

  • 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 the Memorandum.
    • Fix the date, time, and venue to call the Extra-Ordinary General Meeting to get approval of shareholders for change in the object clause.
    • Approve the notice of EGM along with the agenda to be discussed and an explanatory statement as per Section 102 of the Companies Act 2013.
  • Conduct EGM

 Take the approval of shareholders by a special resolution passed in a duly conducted EGM. Such a resolution shall be passed by a three-fourth 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. A Special Resolution shall be passed by Postal Ballot in the 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.

 

  • ROC Filing

 After passing the Special Resolution, the Company must file the resolution passed for alternating the object clause in MOA with the concerned Registrar in MGT-14, along with the prescribed fee, within 3 days of passing such resolution. The following attachments shall be annexed to the form:

    • Notice of EGM
    • CTC of Special Resolution
    • Altered MOA
    • CTC Board resolution passed
  • Approval By ROC

 On receipt of the application, the Registrar shall scrutinize it. 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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