Change Object Clause
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Change Object Clause
Sometimes a company may decide to change the objects with which the company was incorporated. The object clause outlines the scope of business and defines the purpose and foot-prints of activities which are being carried out by the company.
The object clause mentioned in Memorandum of Association of a company can be categorized as :
- Main object: Main business activity of the company.
- Ancillary objects: Activities that are necessary for conducting the main business activity.
STEP 1: A Board Meeting is convened to discuss the requirement for alteration of object clause and pass a resolution for the same subject to approval of members and the ROC.
STEP 2: An extra-ordinary general meeting is convened to pass a special resolution to alter the name clause of the Memorandum of Association.
STEP 3: The MCA is intimated of the passed Special Resolution in Form MGT-14 along with the amended copy of MOA & AOA, notice of EGM and special resolution.
STEP 4: The ROC approves the alteration of the object clause.
- Drafting of Board Resolution
- Drafting of EGM Resolution
- Filing of Form MGT-14
- ROC Fees for forms not included
- Drafting of Notice for EGM along with explanatory statement
- Certificate of Incorporation
- Previous Articles of association (AOA)
- List of Directors and Shareholders
- Digital signature of the authorized director
- Previous Memorandum of Association (MOA)
Filling of Form MGT-14 within 30 days of passing special resolution is the appropriate manner to communicate the request for change in object clause of a company.
The main difference is that the main object defines main business activities of the company while ancillary objects contains incidental business activity which is related to main business activity. These are always being mentioned in memorandum of company.
In such a situation, the main object clause will be changed with the NIC code as per the National Industrial Classification (NIC) Code, 2004.
If a Company having main object as manufacturing and trading of motor parts wants to start altogether a new business activity of electronic goods, it can do so by changing its main objects clause as per the provisions of the Companies Act, 2013. The compliance required on part of the Company would be to call a Board meeting, Extraordinary General Meeting and then filing Form MGT-14 and altered copies of MOA.