Going through company registration in India is already regarded as a herculean task due to the amount of work involved in getting the company started and then being recognized by the proper authoritative body. The Object Clause in the Memorandum of Association (MOA) of the Companies Act, 2013, is viewed as one of the most essential and integral parts of having the company started. The Object Clause can be understood as the clause under which a business entity declares and defines the scope and ambit of the activity to be conducted by the company. It brings to light the main objectives and intentions which the company is trying to pursue after being incorporated. It further involves the entity to enlist all the necessary or incidental objects or “Other Objects” required for the further pursuance of the Main Objects. In other words, it requires the company to list the objects needed to conduct the Main Objects of the business
The procedure for changes in the Object Clause of the MOA are as follows:
The first initiative a corporate entity should take to bring changes in their Object Clause is to gain the approval in the majority of all their board members by conducting a board meeting. Further an Extraordinary General Meeting (EGM) should be initiated in order to get the approval of all the shareholders for the changes proposed in the Object Clause. There should be an ample amount of time provided for the meeting to be conducted as well as the EGM to gain the approval successfully. This is provided under Section 13 of the Act.
The step to be followed after the approval of the board being achieved is to have the EGM conducted with all the members, directors, and auditors of the company. A time, date, and venue should be provided with a notice provided at least twenty-one days prior, regarding the explanatory statements for the reason the change in Object Clause is being pursued. This is provided under Section 101 of the Act.
The next step would involve having the Special Resolution provided under Section 13(1) of the Act passed at the EGM with the consent of all required personnel present.
After having the resolution approved and passed at the EGM, the company will be required to file the Special Resolution within the span of thirty days’ time from the date of approval to the Registrar with the required Form MGT-14. Under this form, the details are to be provided of the Special Resolution alongside the notice of the EGM, explanatory statement of the given notice, and the altered MOA in order to have the Registrar to view the filed form.
Under this step, the Registrar is to register the filed application for the alteration to the objects of the company and certify the registration within the period of thirty days from the date of the Special Resolution was filed under Section 13(9) of the Act. Further provided by the Act, under Section 13(10), it is that no alterations can be in effect till the registration has been done successfully.
It should be noted, that since the Companies Act has been updated and amended under which the Registrar may view the old memorandum or articles as outdated or repugnant due to the inconsistencies with the new and updated laws causing them to be termed void.
The nature of this article is brief and informative but does not indulge within the depth and intricacies involved in having a company’s Object Clause changed. The procedure for filing under the Memorandum of Association (MOA) is not a simple task which can be completed without facing complications for a Company causing a lot of time to and energy to be wasted as the legal work is convoluted and time sensitive. Here at Company Vakil we make it easier than ever for any Company to file any application necessary for a Company to the proper authority without getting involved in any of the legal hassles at the most economical prices. Our team of legal experts is thoroughly astute with Company law and provides all the work required in a proficient and excelling professional manner making Company Registration a cakewalk.