BBNC

Change in Objects Clause


Changes to the Company's Object Clause need changes to the Company's Memorandum of Association. Object clauses are altered by companies in order to expand their operations. If a Company so wants, it can change its object clause by adding, deleting, substituting, modifying, or in any other way.
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Overview

The modification of the object clause of the Company's Memorandum of Association is dealt with under Section 13 read with Rule 29 of the Companies (Incorporation) Rules, 2013.

A special resolution can amend the company's object, and the Registrar must register any changes to the memorandum relating to the company's objects and certify the registration.

A company's Memorandum of Association (MOA) has five clauses:
  1. Name Clause
  2. Situation Clause
  3. Object Clause
  4. Capital Clause
  5. Subscription Clause
  6. Nomination Clause (In case of a OPC)
Object Clauses are the clauses that define the goal and scope of activities that a company can engage in during the course of its existence.

Changes to the Company's Object Clause are subject to certain restrictions.

A company that has raised funds through a public prospectus must not change its Memorandum if it still has any unutilized amount of money raised, unless the company has passed a Special Resolution to that effect.
  1. Details of such resolution must also be required to be published in one English newspaper and one in vernacular language in the area where the Company's Registered Office is located, as well as on the Company's website, if any, stating the cause for change.
  2. If any of the Company's members express dissatisfaction, they will be given an opportunity to be heard by the promoters and shareholders in charge, as per the SEBI requirements.



Checklist/Requirements

  1. Corporate Identification Number (CIN) /name of the Company
  2. Valid DSC (Digital signature Certificate) of Existing Director of the Company
  3. Draft objects of the Company

Process of Change in Objects Clause

Step 1: Raise a request with us, discussion with BBNC team.

Step 2: Share the information/documents required.

Step 3: Convene and hold Meeting and pass Resolution.

Step 4: BBNC to share object change documents with client.

Step 5: Share executed documents.

Step 6: Filing of e-Form with Ministry.

Step 7: Obtain approval for object change.

Key Deliverables

  1. Resolutions and Filed e-Forms
  2. Challan
  3. Altered Memorandum of Association

Change in Object Clause of the company

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Frequently Asked Questions


After incorporation, a company may modify the object clause in order to expand. If a Company so wishes, it can change its object clause by adding, deleting, substituting, modifying, or in any other way by following the procedure as prescribed under the act and filing corresponding forms with the registrar.
The most significant clause in the MOA is the objects clause, often known as the objective clause. It establishes and restricts the scope of the firm's activity. It outlines how the members' investment will be used and details the company's area of activities.
The word "alter" is defined as "to modify/change or vary; to create or become different in some way." The terms "alter" and "alteration" are defined under Section 2(3) of the Companies Act, 2013 (the Act) to include additions, omissions, and substitutes.
The answer is yes, however it depends on whether or not the activities are connected. With the agreement of the member, the firm may engage in several activities. All of these activities must be stated within the purpose clause, as described above. However the company cannot have two diverse activities. Example: a company cannot have both construction of buildings and food and beverages business in its objectives. It may however have food and beverage activities, restaurant services or construction activities and development activities as both are inter related activities.
The Registrar of company may impose a penalty of Rs. 100/- per day from the date on which the forms are due to be filed until the form is actually filed. Further, the directors of the company may attract disqualification for non compliance as per Section 164 of the Companies Act 2013.