Change in Main Objects
Change in Main Objects
₹
2,000/-*
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- Statutory Fees including Additional Fees, Penalty in course of Filing of Form MGT-14 is not included in the above amount.
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Change in Main Objects
Object clause mentioned in Memorandum of Association of a company explains–
- Main business activity of the company (Main object)
- Activities which are necessary for conducting the main business activity (Ancillary objects)
The main object clause of MOA defines the scope of a company’s business activities. The Object Clause is the one of the VI clauses a Company’s Memorandum of Association contains. Its purpose is to define the primary business activities of a Company. The company is restricted to conduct only those activities which are mentioned in the Object Clause. So, to expand and alter the scope of its activities, a company will have to first change the object clause of its MOA.
The Object clause is one of the most significant clauses of the MOA. It defines the scope and extent of activities a company can undertake in its due course of business. An activity which has not been mentioned in the MOA cannot be carried out by the company, unless an alteration is made to that effect in the Object clause. The doctrine of Ultra Vires applies here which states that any activity or transaction of the company which falls outside the object clause of the Memorandum shall be considered “Ultra Vires” or beyond the powers of the company to carry out.
To effect a change in a company’s main or ancillary objects, the following steps must be followed:
Step 1: Board Resolution
A resolution must be passed at a board meeting to approve the amendment to the object clause. The meeting will authorize a director or the Company Secretary to sign, certify, and file the necessary forms with the Registrar of Companies (RoC). The Board of Directors will also schedule an Extraordinary General Meeting (EGM) and specify the day, time, and venue.
Step 2: Special Resolution in EGM
During the EGM, members will pass a special resolution. If the company has raised funds from the public through a prospectus and has unutilized funds, additional disclosures and a special resolution are required. The members will vote through postal ballot, and the notice to members will include details such as total funds received, utilized funds, proposed changes, justification, amount for new objects, financial impact, and relevant information. The special resolution will be published in newspapers and on the company’s website. Dissenting shareholders will be given an opportunity to exit.
Step 3: MGT-14 Filing with RoC
After the special resolution is passed, the authorized director or company secretary will file Form MGT-14 with the RoC. The filing includes a certified copy of the special resolution, the notice of EGM, explanatory statement, and the altered Memorandum of Association.
Step 4: Issuance of Fresh Certificate of Incorporation
Upon receiving MGT-14, the RoC will review the form. If satisfied, they will register the change in the object clause and issue a fresh certificate of incorporation. The change is not considered complete until the RoC provides the new certificate.
Step 5: Incorporating Object Clause in MoA and AoA
Once the fresh certificate of incorporation is received, the amended object clause must be incorporated into all copies of the Memorandum of Association.