Procedure for change in object clause of the company

  • September 06, 2022
  • Dushyant Sharma
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The following write-up is aimed at explaining the procedure required for change in Object Clause of a particular company under the Companies Act, 2013. Besides explaining the procedure, it will also provide an in-depth analysis on the documents needed to make the entire process a smooth one.

One of the first steps to change object clause of the private limited company registration requires a change in the Memorandum of Association of the company, often called Memorandum in common usage.

Before moving on further, let's discuss a bit about of Memorandum of the company. It will help us as we start talking about the process in detail. Section 4(6) of the Companies Act, 2013 the Memorandum of the company shall be in forms specified in tables A, B, C, D and E in schedule I as may be applicable to such company. Whereas according to section 4(1) Memorandum has following important clauses:

  1. Name Clause which tells about the name of the Company
  2. Registered Office Clause which tells about the state of the country where the company is registered.
  3. Objects clause of the Company and other pertinent matters.
  4. Liability Clause which describes the liability of members of the company.
  5. Share Capital clause meaning the authorized way of sharing the capital of the company.

Alteration of Memorandum of Association may be of different kinds

Altering the name clause mentioned in sections 13 (2) and (3). Altering the Registered Office Clause mentioned in section 13 (4) (5) and (7). Altering the object clause mentioned in section 13 (8) and (9). Altering the Capital clause mentioned in section 61 read with section 64.

Alteration of Memorandum of Association due to change in Object Clause has following provisions

Major provisions pertaining to alteration of Memorandum are provided in Section 13 of the Companies Act, 2013 read with Companies (Incorporation) Rules, 2014. Regulation of the process of amendment of memorandum depends on the application of section 13.

It must be noted here that all the clauses of the Memorandum can be altered by using the provisions of section 13. However, the capital clause cannot be altered using the clauses of section 13. And any alteration in the memorandum will require the consent of the members which is achieved via Special Resolution. However, in case of alteration of capital clause, consent of members is required and it is done through Ordinary Resolution mentioned in 61. It can be altered by following those provisions which are mentioned in section 61 read with section 64 of Companies Act, 2013. Now we will discuss the procedure required for change in object.

Board meeting:

A notice needs to be issued in accordance with the provisions of section 173(3) of the Companies Act, 2013, for having a meeting of the Board of Directors. The primary agenda for this meeting is to get in-principal approval of board of directors for change in object clause of Memorandum. This meeting also seeks to fix date, time and place for convening extra-ordinary general meeting (EGM) to get the nod of shareholders, through Special Resolution, for amending the object clause of Memorandum. This amendment must accord with the requirement of section 13 of the Companies Act, 2013 to approve notice of EGM along with Agenda and Explanatory Statement to be appropriated to the notice of General Meeting as per section 102(1) of the Companies Act, 2013.

To authorise the director or CS to issue notice of this meeting which was approved by the board under clause 1(c) as mentioned already.

Issuance of notice of the extra-ordinary general meeting to all members, directors and the auditors of the company in accordance with the provisions of Section 101 of the Companies Act, 2013.

Conducting the meeting.

Conducting the general meeting.

Conducting the extra-ordinary general meeting (EGM) on scheduled date and pass the required special resolution under section 13(1) of the Companies Act, 2013.

ROC Form filing:Section 13(6) says that a company will be needed to file special resolution passed by shareholders for altering the special resolution with the particular registrar of companies along with the fees and some more formalities, which are mentioned below.

Notice of EGM

A certified copy of special resolution of Memorandum from the registrar of companies.

Altered Memorandum of Association

A certified copy of resolution adopted by the board can be provided as an additional option.

Apart from all these procedures, there is a small restriction vis a vis change in object clause of memorandum.

As per Section 13 (8) and Rule 32 a company which has

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Dushyant Sharma
Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.

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