Change Business Aim and Objectives

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Change Business Aim and Objectives

CHANGE OF OBJECTIVES OF BUSINESS

Object Clause is in company’s memorandum of association which is created and filed with Registrar of Companies, at the time of incorporation. Object clause specifies those objectives for which a company is registered in India. Company cannot do any other business which is not specified in the object clause of memorandum of association. There can be instances where you may require to diversify your business or add a new business line to your main object clause. As the object clause is a part of Memorandum of Association (MOA) of company, hence any change in object clause requires alteration in the MOA. Section 13 of the Companies Act, 2013 deals with the alteration of Memorandum of Association. As per the provisions of Section 13, a company may, alter its MOA with the approval of shareholders in a general meeting by way of ordinary or special resolution as the case may be. Object Clause of MOA can be altered by way of special resolution.


THINGS TO KNOW

  • As per Section 4 (6) of Companies Act, 2013 company’s MOA shall be drafted in specified schedule I based on the type of the company that is to be registered with RoC.
  • Schedule I has tables A, B, C, D, and E which is to be used on the type of the company planning to register i.e. private or public limited or non profit organisation. .
  • Name clause, Registered office clause, Object clause, liability clause and share capital clause are the important as per Section 4 (1) of Companies Act, 2013
  • For any change/alteration in the capital clause, company is required to pass ordinary resolution as per Section 61 of the Companies act, 2013. Both section 61 and 64 is important to change capital clause in MOA.

PROCEDURE FOR CHANGE IN OBJECT CLAUSE

  • Calling of Board Meeting: Issue notice in accordance with the provisions of section 173(3) of the Companies Act, 2013, for convening a meeting of the Board of Directors.
  • To Get in-principal approval of Directors for change in object clause of Memorandum
  • Fix date, time and place for holding Extra-ordinary General meeting (EGM) to get approval of shareholders, by way of Special Resolution, for amendment in object clause of Memorandum. This amendment in object clause of Memorandum shall be in accordance with the requirement of section 13 of the Companies Act, 2013
  • To approve notice of EGM along with Agenda and Explanatory Statement to be annexed to the notice of General Meeting as per section 102(1) of the Companies Act, 2013;
  • To authorise the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM) as approved by the board under clause 1(c) mentioned above
  • Issue Notice of the Extra-ordinary General meeting (EGM) to all Members, Directors and the Auditors of the company in accordance with the provisions of Section 101 of the Companies Act, 2013
  • Holding of General Meeting: Hold the Extra-ordinary General meeting (EGM) on due date and pass the necessary Special Resolution under section 13(1) of the Companies Act, 2013, for change in object clause of Memorandum
  • ROC Form filing: As per section 13(6), Company is required to file Special Resolution passed by shareholders for alteration of Memorandum with concerned Registrar of Companies. Hence, file form MGT.14 within 30 days of passing of Special Resolution with the concerned Registrar of Companies

Documents Required

  • Notice of EGM.
  • Certified True copy of Special Resolution.
  • Altered Memorandum of Association.
  • Minutes of the Board meeting
  • Minutes of the Extra-Ordinary General meeting
  • Certified True copy of Board Resolution may be attached as an optional attachment.
  • ID proof –all directors
  • Address proof- all directors
  • Attendance Sheet /Register –Board meetings
  • Attendance Sheet /Register –General meetings

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