Company Object Change

Introduction

Streamline Your Company Object Change with Expertise from CorpIQ

At CorpIQ, we recognize that the evolution of a company often requires a change in its core objectives. Adjusting your company's objectives to meet new business directions is a significant legal undertaking that demands careful handling. Our seasoned team of Chartered Accountants, Company Secretaries, and Lawyers is equipped to guide you through the entire process of amending your company's object clause, as outlined in the Memorandum of Association (MOA).

CorpIQ's OBJECT CHANGE SERVICES INCLUDE:

- Initial Consultation: We begin with understanding your business's new objectives and advising on how to align the changes with your company's growth strategy and legal requirements.

- Drafting Resolutions: Our team drafts the necessary special resolutions for the alteration of the object clause of the MOA, ensuring precision and legal soundness.

- Shareholder Approval: CorpIQ assists in convening and documenting the Extraordinary General Meeting (EGM) or Annual General Meeting (AGM) where the shareholders' approval for the change is obtained.

- Regulatory Compliance: We manage the filing of Form MGT-14 and any other required forms with the Registrar of Companies (ROC), including the altered MOA, to officially register the changes.

- Advisory Impact: CorpIQ provides advisory services on the potential impacts of object change on existing contracts, operations, and compliance obligations.

- Post-Change Formalities: After the object change, we assist with updating the change across all business vertical and regulatory bodies, ensuring your business reflects its new objectives everywhere necessary.

Note: Change is inevitable in the dynamic business landscape, and when your company's objectives need to pivot, CorpIQ ensures that the transition is seamless and legally compliant.

LEGAL SIDE OF COMPAN OBJECT CHANGE:

The alteration of the object clause of the Memorandum of Association of the company is governed by Section 13 of the Companies Act, 2013 read with Rule 29 of the Companies (Incorporation) Rules, 2014. In this article, we describe the process of changing the object clause of the company. It is the Memorandum of Association of a Company which defines the scope of the activities a Company is permitted to conduct throughout its existence. As well as defining the rights of the company's members, it establishes the relationship between the company and its members as well. The purpose of this article is to explain how to alter the object clause of a Memorandum of Association.

FEATURES

• Object Clauses define the purpose and range of activities that a company can engage in during its lifetime.
• After incorporation of a company, it is possible for the company to change its object clause for the purpose of expanding.
• The object clause of a company can be altered only if the company wants to, by adding, deleting, substituting, or modifying it, or in any other way.

 

RESTRICTIONS

The Company's Object Clause is restricted from being altered. Following are the Object Clause Alteration Restrictions:

• It is a requirement of Section 13(8) of the Companies Act 2013 read with rule 32 of the Companies (Incorporation) Rules, 2014 for a company that has raised funds through a public prospectus to not amend its Memorandum if any of the money raised has not yet been fully utilized unless the company has adopted a Special Resolution to that effect.

• There shall also be a publication of the details of such resolution in one English and one vernacular newspaper where the Registered Office of the Company is located and at the Company's website highlighting the reason for the change.

• In the event that any of the Company's members voice dissent, they will be offered the chance to be heard by the promoters and shareholders having control as specified by SEBI regulations.

• Under Rule 32 of the Companies (Incorporation) Rules, 2014, the Special Resolution in the above mentioned case shall be passed by postal ballot.

 

THINGS TO BE KEPT IN MIND:

During the preparation of the Notice of Extraordinary General Meeting for the above-mentioned case, the following particulars shall be included –

• Total amount of money received;
• Money used to accomplish the prospectus's objectives;
• Amount left over from the stated prospectus that has not been utilized;
• Changes to the object clause;
• The reasons for the changes;
• The amount that will be utilized for the new items;
• Amounts estimated to affect the Company's earnings and cash flows as a result of the alterations;
• The place where a copy of the notice of Special Resolution can be obtained by anyone interested.
• Detailed information about any other relevant issues;

 

PROCEDURE:

• A Board Meeting is held in accordance with section 173 and Secretarial Standard-1, during which the new objectives of the company are proposed, subject to the approval of the Members.
• An Extraordinary General Meeting of the Company will be held to obtain approval from the Members of the Company to alter the object clause by means of a Special Resolution along with an explanatory statement, as required by Section 101 and 102 of the Companies Act, 2013.
• The Company's Memorandum of Association needs to be amended.
• E-form - MGT-14 shall be filed within 30 days of the Special Resolution's passing, along with the following attachments:
• Explanatory statements along with certified true copies of the Special Resolutions;
• The altered Memorandum of Association in printed form;
• Consent for a shorter notice if applicable.

Upon completion of the above process, the Registrar shall register the alteration and issue the Company with a Certificate that confirms compliance with all requirements.