Change in Object Clause

A company's Memorandum of Association (MoA) outlines its objects or purposes. When a company needs to expand its business activities beyond the scope of its existing objects, it may require a change in its object clause.

Here's a step-by-step process to change the object clause of a company:

1. Board Resolution:

   • The board of directors must pass a resolution approving the proposed change in the object clause.
   • The resolution should clearly state the reasons for the change and the proposed new objects.

2. Special Resolution:

   • A special resolution must be passed by the shareholders at a general meeting.
   • This requires a majority of at least three-fourths of the votes cast by the shareholders present in person or by proxy.

3. Filing Form MGT-14:

   • Once the special resolution is passed, the company must file Form MGT-14 with the Registrar of Companies (RoC).
   • This form contains details of the special resolution and the proposed changes to the MoA.

4. RoC Verification:

   • The RoC will verify the documents submitted with Form MGT-14.
   • If the RoC is satisfied, it will issue a certificate of incorporation with the amended MoA.

Key Points to Consider:

• Clarity and Specificity: The new object clause should be drafted clearly and specifically to avoid ambiguity.
• Consistency with Existing Objects: The new objects should be consistent with the company's existing business and operations.
• Compliance with Regulations: Ensure compliance with all relevant laws and regulations, including foreign exchange regulations if applicable.
• Professional Advice: Consult with legal and tax professionals to ensure a smooth and compliant process.

Why Change the Object Clause?

• Business Expansion: To accommodate new business lines or ventures.
• Diversification: To diversify the company's activities and reduce risk.
• Strategic Alliances: To facilitate partnerships or joint ventures.
• Regulatory Compliance: To comply with changes in regulations or industry standards.