Company Object Change: Procedure, Documents, Fees and Timelines

The company is incorporated and operates to achieve certain objectives. The objective of the company defines the activities and operations it carries out on a daily basis. Every company’s object is mentioned in its Memorandum of Association (MOA). A company cannot undertake activities outside the scope of its objective. If a company does anything other than the activity suggested by its MOA, then it is called an ultra vires act. There can be instances in which a company would want to undergo the company object change process. This can be done by following the procedure for a change in the object clause of the company.

What is a Memorandum of Association (MOA)?

The Memorandum of Association (MOA) is also known as the charter document of the company. It is a vital document containing all the important information about the company. Anyone can know everything about any company by reading its MOA.

It contains information like name, date of incorporation, registered office, shareholders and their shareholding, etc. The information in the MOA is divided into different clauses, like:

• Name clause
• Situation clause
• Object clause
• Liability clause
• Capital clause
• Declaration clause
• Nominee clause

Key Reasons for Company Object Change

The change in company object clause can be due to various reasons, such as:

• Change in Products/ Services: The company might decide to change the products or services it offers or add a new range of products or services to its product/service portfolio. In either of the cases, the company is required to change its object clause if it is different from the activity suggested by its MOA.
• Entry into New Markets: Many times, companies want to diversify and enter new markets to grow. This can lead to the introduction of new activity, which will require the alteration of the object clause of the company.
• Changes in Technology: There can be situations involving change in technology. This would force the companies to leave the outdated technology and adopt the new technology to retain their market share, which would therefore create a need for company object change.
• Changes in Consumer Preferences: Consumers are the ultimate goal of every business. If consumer preferences are changed, then the company is required to improve its services and products to satisfy its consumers' needs. This can also lead to a change in the object clause to add new products or services as per the needs of consumers.

Procedure for Change in Object Clause of Private Limited Company

If a company wants to conduct any business activity outside the scope of its object clause, it should undergo company object change. The step-by-step process for company object clause change is provided below:

Step 1: Pass a Board Resolution

The first step is to convene a board meeting of the board of directors of the company to obtain their consent and pass the board resolution:

• To authorise the change of the object clause of the company
• Call the general meeting of the company
• Decide the day, time, place, and venue of the general meeting
• Authorise one or more directors to complete the whole procedure of company object change

Step 2: Obtain Approval of Shareholders

The company should obtain the consent of shareholders for the change of object clause of the company. Consent can be obtained by passing a special resolution at the duly convened meeting.

Step 3: Intimate Registrar of Companies (ROC)

The company shall, within 30 days of passing the resolution authorising the object change, inform the registrar of companies (ROC) by filing Form MGT-14 along with the attachments, namely:

• Copy of certified special resolution
• Notice of general meeting
• An explanation statement is attached to the notice
• Amended Copy of MOA containing altered Object Clause

Procedure for Change in Object Clause of Public Limited Company

In case a public limited company decides to change its object clause, the following additional points should be followed along with the above procedure:

• A special resolution should be passed through postal ballot
• The details of the special resolution should be published in one English newspaper and one vernacular language newspaper
• Details of special resolution shall be published on the website of the company, if any
• Shareholders dissenting to the change in the object clause should be given an exit opportunity

Documents required for Company Object Change

The company is required to file the necessary documents to successfully change its object clause. The documents that should be filed by the company for a company object change are:

• Copy of certified special resolution
• Notice of general meeting
• An explanation statement is attached to the notice
• Amended Copy of MOA containing altered Object Clause

Fees for Company Object Change

The fees for company object change depend on the share capital of the company. The fee structure for company object changes is as follows:

BizFoc’s professional fee (excluding GST) for the Object change is as follows:

Timeline for Object Change

The Object Change of company requires filing of MGT 14, drafting new MOA and filing New MOA approval form with ROC. The process of of Object change is simple if done under professional assistance. The approximate time for the object change of the Company is 7 to 8 days.

Penalty for Non-Compliance

Any company that wants to change its object clause should do so in accordance with the provisions of Section 13 of the Companies Act, 2013.

However, if any company fails to comply with any of the provisions for company object change, then the company will face the consequences in the form of a penalty.

The penalty for delay in filing Form MGT-14 with ROC is:

Why Choose BizFoc for Company Object Change?

BizFoc is a highly reputed consultant and corporate advisor. We have helped many of our clients with their company object change by providing valuable advice and conducting the entire process of object change on their behalf. BizFoc can help you alter your MOA to add new business activity. This whole process can be butter smooth by joining hands with us.

Conclusion

In conclusion, any company can change its object clause by undergoing a simple procedure. The change in the object clause can be due to various reasons, such as a change in products or services, entering into new markets, changes in technology, changes in consumer preferences, etc. The company is required to pass a special resolution to authorise the company object change.

The company should comply with all the procedures to ensure that it does not face any penalties or legal action. BizFoc can be a helping hand in the whole process of company object change. You can contact us today to get your object changed quickly!

Can a company change its object?