How to Change the Objects Clause of your Company?

To change the objects clause of your company, the MOA of the company would have to be amended to change the objectives of the company.

The Memorandum of Association (MOA) mentions the objectives of the company under the objects clause. These objectives are said to be the guidelines of the company’s activities and purpose of existence and are usually defined during the incorporation of a company. However, in certain cases, these objectives would need to be changed in case the company decides to take up additional activities, or any other such requirements.

3 Simple Steps to Change the Objects Clause

1. Board Resolution

The change would have to initiate from the Board of the Company

• A notice for conducting a Board Meeting would have to be issued to all the Directors of the company at least seven days prior to the same, along with the specific agenda for the same.
• In the Board Meeting, a proposal for convening an Extra Ordinary General Meeting would have to be initiated to change the objects clause by way of a special resolution.
• To this end, the venue, time and date of the meeting would have to be decided.
• A director would have to be authorised to send the notice of the EGM to shareholders.
• The notice for the EGM must be sent at least 21 days before the General Meeting, along with an explanatory statement.
• In case the company has 200 or more shareholders, the special resolution can be passed by way of a postal ballot.

2. Conduct General Meeting

• In the general meeting, the special resolution is to be passed by three-fourths majority.
• In case the resolution is passed via postal ballot, the results can be announced by the Managing Director or Chairman.
• Once the resolution is passed, a listed company must send a copy of the EGM notice and proceeding of the meeting to the stock exchanges where the company has been listed

3. Filing of Form MGT-14

• Once the special resolution has been passed in the EGM, a copy of the same along with an explanatory statement is filed with the concerned ROC within a period of 30 days.
• The resolution is to be accompanied by the MGT-14 form, signed by the Managing Director or the Company Secretary authorised by the Board Resolution.
• The form is to be digitally signed by a practising Chartered Accountant or Company Secretary to authenticate the same.

Also Read: Process of Altering Memorandum of Association of a Company

Additional for a Public Limited Company

In case a public limited company decides to change its objects clause, then:

• The special resolution passed in the EGM must be published in one English language newspaper, apart from one to be published in a vernacular language paper.
• The newspaper must necessarily be in circulation in the state/city where the company’s registered office is located.
• An addition notification is to be placed on the company’s website.
• The shareholders who don’t agree with the change in the objects clause, who have to be given an exit option.

Summing up

Once the approval of the Registrar is obtained on the MGT-14 form, the company can make the necessary alterations to the MOA, as agreed upon by the special resolution. Each and every copy of the company’s MOA would have to be accordingly changed. Additionally, once the MOA is altered, a copy of the amended document has to be sent to the stock exchanges.