The object clause of a private company is an essential part of its memorandum of association. It specifies the primary objects for which the company was formed and defines the scope of its activities. However, there may be instances where a private company may need to change its object clause to expand its business or to align with its current operations. In this blog, we will discuss the procedure for changing the object clause of a private company.
Step 1: Board Resolution
The first step in changing the object clause of a private company is to pass a board resolution. The board of directors needs to convene a meeting and pass a resolution approving the proposed change in the object clause. The resolution should specify the details of the proposed change and the reasons for the change.
Step 2: Call for Extraordinary General Meeting (EGM)
After passing the board resolution, the company needs to call for an extraordinary general meeting (EGM). The notice of the EGM should be issued to all the shareholders of the company. The notice should specify the date, time, and venue of the EGM, along with the agenda and the proposed changes to the object clause.
Step 3: Hold EGM and Pass Special Resolution
The EGM needs to be held on the specified date, and the shareholders need to pass a special resolution to approve the change in the object clause. The special resolution should be passed by a majority of not less than three-fourths of the members present in person or by proxy.
Step 4: File Form MGT-14
After passing the special resolution, the company needs to file Form MGT-14 with the Registrar of Companies (ROC) within 30 days of passing the resolution. Form MGT-14 is a notice of the resolution passed at the EGM, and it should be accompanied by a certified copy of the special resolution and the explanatory statement.
Step 5: File Form INC-24
Along with Form MGT-14, the company also needs to file Form INC-24 with the ROC within 30 days of passing the special resolution. Form INC-24 is an application for the approval of the change in the object clause, and it should be accompanied by the following documents:
The special resolution adopted at the EGM in its entirety
A copy of the updated memorandum of association
A copy of the board resolution approving the change in the object clause
a duplicate of the EGM notice
a duplicate of the EGM minutes
Step 6: Obtain Approval from ROC
After filing Form MGT-14 and Form INC-24, the ROC will review the documents and approve the change in the object clause if everything is in order. If the ROC requires any further clarification or documents, the company may need to provide them before obtaining the approval.
Step 7: Update MOA and AOA
After obtaining the approval from the ROC, the company needs to update its memorandum of association (MOA) and articles of association (AOA) with the new object clause. The updated MOA and AOA should be filed with the ROC within 30 days of the approval.
In conclusion :
Changing the object clause of a private company requires following a specific procedure. It involves passing a board resolution, calling for an EGM, passing a special resolution, filing Form MGT-14 and Form INC-24 with the ROC, obtaining the approval from the ROC, and updating the MOA and AOA. By following this procedure, a private company can change its object clause and expand its business or align with its current operations.