Change objectives of Your Business

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CHANGE OF OBJECT OF BUSINESS

To understand the procedure of “Change of Object” of a Company we need to understand the nature of the Memorandum of Association. A Memorandum of Association is a charter of the Company it is also called the constitution of the Company. It contains:

Name Clause: contains the name of the company
Situation Clause: Contains state in which the registered office of the Company is situated
Liability Clause: Extent of liability of members of the company
Capital Clause: Authorized Capital of the Company & its break up
Subscriber Clause: Details of persons agreed to subscribe shares of the company after its incorporation

So, if we want to change the object clause of the company, then we have to also change the Memorandum of Association of the Company, and to carry on any business other than that of contained in Object Clause, is prohibited.

Important Provisions

As per Section 13 of the Companies Act 2013 for the alteration of the Memorandum of Association of the Company with respect to change in object clause, a special resolution must be passed in the meeting of its members.

If any company raises money from the public by way of issuing a prospectus and still has unutilized amount out of such money then it can change its object clause of its Memorandum of Association by passing a special resolution. But it has to give the details, in respect of such resolution must also be published in the newspapers one in English and one in the native language and shall also be placed on the website of the company, if any, indicating therein the justification for such change and must give the dissenting shareholders an opportunity to exit.

Procedure of change of object clause

Board Meetings

Convene board meeting discuss following matters

To get the Director's approval for change of Object Clause
Fix date, time, and place for holding Extra-ordinary General meeting (EGM) to get the consent of members by way of Special Resolution, for change of Object clause of Memorandum.
To issue the notice of EGM along with an Explanatory Statement to be attached to the notice of the General Meeting.
To approve the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM).
To Authorize the Directors of Company to make Application with ROC for application for change of Object clause and to prepare a new set of amended Memorandum of the Company.
Prepare minutes of such a Board Meeting.

ROC FILING

File necessary e-Forms along with attachments with Registrar of Companies

Form MGT-14 for filling special resolution with following attachments
1. Altered Memorandum of Association
2. Notice of General Meeting
3. Copy of Special Resolution

GENERAL MEETING

Convene Extra-Ordinary General Meeting of the members of the Company at place & time mentioned in Notice to transact following businesses

Change the Object of the Company, subject to the approval of ROC
Alteration of the Name Clause of the Memorandum of Association of the Company

NOTICE

Issue Notice of the Extra-ordinary General meeting (EOGM) to all Members, Directors, the Auditors and to all other persons entitled to such notice.