Change in Object Clause

The Object Clause of a company, outlined in the Memorandum of Association (MOA), defines the core purpose and activities of the entity. It forms the foundation of every company registered under the Companies Act, 2013. To make changes to the Object Clause of the company, the procedure involves amending the MOA to include new objectives. This process must follow a structured secretarial procedure to ensure compliance and proper documentation.

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What is a Memorandum of Association or MOA

The Memorandum of Association (MOA) serves as the foundational document for any company upon registration. It is often referred to as the company's "constitution" as it outlines the rights, responsibilities, and scope of operations within which the business functions. In the event of a conflict between the clauses in the MOA and the Companies Act, the provisions of the law take precedence.

The Object Clause is a key component of the MOA, specifying the company’s objectives and purpose for which it is incorporated. The company is legally bound to operate only within the boundaries set by this clause and cannot engage in activities outside its defined objects. Any action or transaction that falls outside the scope of the MOA is considered ultra vires, meaning it is void and legally unenforceable. For example, when the company enters into a contract or business arrangement with a third party, the MOA serves as a public document that governs the company's legitimacy and authority in such dealings.

The Memorandum of Association (MOA) must be prepared in accordance with the format specified in Table A of Schedule I of the Companies Act 2013. The company must choose the appropriate table based on its business type or status. The available options are:

Table A: For companies limited by shares.
Table B: For companies limited by guarantee with no share capital.
Table C: For companies limited by guarantee but with share capital.
Table D: For unlimited companies.
Table E: For unlimited companies with share capital.

Contents included in the MOA of the company

The Memorandum of Association (MOA) of a company consists of the following key clauses:

Name Clause: This is the first clause in the MOA, specifying the name of the company. The name must end with terms like "Limited," "OPC Private Limited," "Private Limited," etc., depending on the company type. This requirement is not applicable to Section 8 companies.
Registered Address Clause: This clause indicates the state in which the company is registered and provides the address of its registered office.
Object Clause: This clause outlines the purpose or objectives for which the company is established and the scope of its activities.
Liability Clause: This clause specifies whether the liability of the company’s members is limited or unlimited.
Capital Clause: The final clause in the MOA, which details the company's authorized capital—how much capital the company can raise for its business activities. The authorized capital is divided into shares, and this clause specifies the total value of those shares.

What is the Object Clause in the Memorandum of Association of the Company?

The Object Clause of a company's Memorandum of Association outlines the specific business activities the company is permitted to engage in after its registration. This clause includes two parts:

Main Activities: The primary business operations the company is set up to conduct.
Ancillary Activities: Additional activities that support or complement the company's main business.

A company is prohibited from engaging in activities that fall outside the scope of its stated objectives. If the company wishes to expand its activities beyond those specified in the Object Clause, the clause must be amended. The process for rectifying or modifying the Object Clause to include new business activities is clearly defined.

The Procedure to Amend Object Clause of the MOA of the Company

If a company intends to expand its business activities beyond those specified in its Object Clause, it must first amend the clause to include the new activities. The amendment process follows a set secretarial procedure:

Board Meeting:
- Send a notice to the Board of Directors at least 7 days before the meeting to discuss the agenda.
- Obtain approval from the Board to amend the Object Clause of the Memorandum of Association (MOA).
- Set the date, time, and venue for an Extra-Ordinary General Meeting (EGM) to get shareholder approval for the amendment.
EGM Preparation:
- Approve the notice of the EGM, which includes the agenda and an explanatory report as per Section 102 of the Companies Act, 2013.
Conduct the EGM:
- Hold the EGM and seek shareholder approval via a special resolution, which requires a three-fourths majority vote.
- If the company is listed, after passing the resolution, submit the special resolution and related information to the stock exchange where the shares are listed.
- For companies with over 200 members or those that have raised funds through a prospectus, the special resolution may need to be passed via postal ballot.
Filing with ROC:
- After the special resolution is passed, the company must submit it to the Registrar of Companies (ROC) in Form MGT-14 within 30 days, along with the prescribed fee. Required attachments include:
  - Certified true copy (CTC) of the special resolution
  - Notice of the EGM
  - CTC of the Board resolution
  - Amended MOA
ROC Approval:
- The ROC will review the submission and, if satisfied, will approve the amendment and issue a certificate of registration within 30 days.

Reason to Amend Object Clause of the Company

Here are some reasons why a company may choose to amend its Object Clause in the Memorandum of Association (MOA):

The company may wish to expand its business operations by broadening its scope.
The company seeks to achieve its existing objectives using new or more efficient methods.
The company may want to incorporate additional business activities that align well with its current operations.
The company intends to sell or dispose of a portion of its operations, which will change the structure of the business.
If the company is merging with or acquiring other companies, it will need to update its Object Clause to reflect the expanded scope of activities.

Once the application is submitted, the Registrar will review it. If the application is deemed correct, the amendment will be approved, and the registration certificate will be issued within 30 days of filing the special resolution.

Frequently Asked Questions

Memorandum of Association is an abbreviation of MOA. MOA of Company is the base of any company which is being registered. It is believed that MOA is the constitution of the Company and also it defines the scope of rights and responsibilities within which the business operates.
A Company that holds such money which remains unused which was raised by the issue of prospectus. Before altering the object clause, such Companies shall pass a resolution, and such resolution shall be displayed or published in both English newspaper and vernacular newspaper.
Earlier object clause comprised of 5 clauses which are now deleted under Companies Act 2013, now it has only two object clause remain in new online form SPICe 33 for MOA, such as Main Objects; and Ancillary Objects.
New E-form 33 is an online SPICe form for MOA of the company which is filed while integrating the Company with SPICe 32 and SPICe 34. Therefore the Company needs not to submit this online form again with form MGT-14 for certification of alteration. Having a physical copy of MOA along with MGT-14 will be enough.