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Company Law » MOA and AOA of Company and Its Alteration » Object Clause And Procedure For Alteration In Object Clause of MOA

MOA and AOA of Company and Its Alteration

Object Clause And Procedure For Alteration In Object Clause of MOA

Object Clause 

  • Under section 4(1)(c) of the Companies Act, 2013 all companies must state in their memorandum the objects for which the company is proposed to be incorporated and any matter considered necessary in furtherance thereof.
  • The third compulsory clause in the memorandum of association states the objects for which the company has been formed. 
  • only restriction is that objects should not be illegal and against the provisions of the Companies Act, 2013.
  • It indicates the purpose for which the company has been set up and its actual capability. 
  • In other words, It states affirmatively the ambit and extent of powers of the company and, stated negatively, that nothing should be done beyond that ambit and that no attempt shall be made to use the company for any other purpose than that which is specified. 
  • The purpose of the objects clause is to enable the persons dealing with the company to know its permitted range of activities. The acts beyond this ambit are ultra vires and hence void. Even the entire body of shareholders cannot ratify such acts.

Object Clause of Memorandum of Association can be divided into two parts :

  • Main Objectives - Means objects for which the company is proposed to be incorporated
  • Ancillary Objectives - Means any matter considered necessary in furtherance of main objectives.

Procedure for Alteration in Object Clause of Memorandum Under Companies Act, 2013 -

Step - 1 : Issue notice of board meeting to all the directors least 7 days before the date of Board Meeting under Sec. 173 and SS-1.

Step - 2 : Call and hold board meeting and 

  • Pass Board Resolution
  • Delegate authority to any one director of the company to sign, certify and file the requisite forms with ROC.
  • Fix day, date, time and venue for holding the general meeting of the Company for passing a special resolution as required by section 13.
  • Authorize the Director or Company Secretary to sign and issue notice of the general meeting.

Step - 3 : If the company altering abject by which company raise money from public through prospectus, than follow these additional steps -

1. Pass special resolution by means of Postal Ballot only.

2. Notice of the resolution for altering the objects shall contain the following particulars: 

  • Total money utilized for the objects stated in the prospectus;
  • Unutilized amount out of the money so raised through prospectus
  • Particulars of proposed alteration/ change in the objects;
  • Justification for the alteration/change; 
  • Amount proposed to be utilized for the new objects; 
  • Estimated financial impact of the proposed alteration on the earnings and cash flow of the company;
  • Other relevant information which is necessary for the members to take an informed decision on the proposed resolution; 
  • Place from where any interested person may obtain a copy of the notice of the resolution to be passed. 

3. Publish an advertisement, giving above mentioned details of special resolution to be passed which shall be published simultaneously with the dispatch of postal ballot notices to shareholder in least one Hindi language , one English language and one principal vernacular language newspaper circulating at the place where the registered office of the company is situated

4. Give an opportunity to the dissenting shareholders to exit by the promoters and shareholders having control in accordance with regulations to be specified by the Securities and Exchange Board.

Step - 4 : Issue notice of General Meeting least 21 days before the actual date of General Meeting all shareholders under section 101 of Companies Act, 2013 and SS-2.

Step - 5 : Call and hold General Meeting for change in object of company and pass Special Resolution.

Special Resolution shall be passed by means of Postal ballot, if company has more than 200 members or the company has raised money from public through prospectus and still has any unutilized amount out of the money so raised.

Step - 8 File MGT -14 within 30 days with ROC from conclusion of General Meeting.

Attachments :

  • Certified copy of Special Resolution, 
  • Minutes of General Meeting,
  • Altered MOA,
  • Altered AOA.
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Company Law

Chapter's Name:

1. Introduction to Company Law
2. Incorporation of Companies
3. MOA and AOA of Company and Its Alteration
4. Prospectus And Allotment of Securities
5. Share and Share Capital

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