Procedure for change in object clause of a Company

Step 1: First call a board meeting for approval of change in object clause. The agenda
of the board meeting will be to approve the change in object clause and to call an EGM to
get the shareholder’s approval for change in object clause.

The board meeting should be called by giving at least 7 days’ notice.

The board will determine the changes in the object clause and will set the agenda for
EGM.

The board will approve notice for calling EGM by fixing date, time and venue of EGM.

Sample Board Resolution:

Change in Object Clause of the Company

“RESOLVED THAT pursuant to the provisions of Section 13 and other applicable provisions, if
any, of Companies Act, 2013, (including any statutory modifications or re-enactment thereof, for
the time being in force), and the rules framed there under, consent of the Board of Directors of the
Company be and is hereby accorded, subject to the approval of the Registrar of Companies, NCT
of Delhi & Haryana and subject to the approval of Shareholders in General Meeting, to append
following sub clause (3) after sub clause (2) of clause III (A) of the Memorandum of Association
of Company:

(4) “To carry on the Business of ………”

FURTHER RESOLVED THAT for the purpose of giving effect to this resolution,
_____________, Director of the Company be and is hereby authorized, on behalf of the Company,
to do all acts, deeds, matters and things as deem necessary, proper or desirable and to sign and
execute all necessary documents, applications and returns for the purpose of giving effect to the
aforesaid resolution along with filing of necessary E-form as return of appointment with the
Registrar of Companies, West Bengal.”
Step 2: The second step after the Board Resolution is to issue notice of
Extraordinary Meeting to all Members, Directors and the Auditors of the company in
accordance with the provisions of Section 101 of the Companies Act, 2013.

The Notice contains the date, time and venue of the EGM. The notice will be accompanied
by an explanatory statement detailing the reasons for change in object clause. Interest of
the director in the resolution should be disclosed in the explanatory statement. The Notice
shall be issued at least 21 clear days before the EGM.

Step 3: The third step is to hold an Extraordinary General Meeting at the time, place
and venue as given in the notice and to pass the necessary Special Resolution under
section 13(1) of the Companies Act, 2013, for change in object clause of Memorandum.

Sample Shareholders Resolution:

Change in Object Clause of the Company

“RESOLVED THAT pursuant to the provisions of Section 13 and other applicable provisions, if
any, of Companies Act, 2013, (including any statutory modifications or re-enactment thereof, for
the time being in force), and the rules framed there under, consent of the shareholders of the
Company be and is hereby accorded, subject to the approval of the Registrar of Companies, NCT
of Delhi & Haryana, to append following sub clause (3) after sub clause (2) of clause III (A) of the
Memorandum of Association of Company:

(4) “To carry on the business of…….”

FURTHER RESOLVED THAT for the purpose of giving effect to this resolution, __________,
Director of the Company be and is hereby authorised, on behalf of the Company, to do all acts,
deeds, matters and things as deem necessary, proper or desirable and to sign and execute all
necessary documents, applications and returns for the purpose of giving effect to the aforesaid
resolution along with filing of necessary E-form as return of appointment with the Registrar of
Companies, West Bengal.”

Step 4: Once the necessary special resolution is passed at the EGM, the company
needs to file the special resolution with the Registrar within 30 days of passing the
resolution. Form MGT-14 is required to be filed for filing the resolution with the
Registrar. Form MGT-14 contains details about the special resolution passed.
Attachments with form MGT-14

 Certified copy of the resolution

 Notice of Extra ordinary General Meeting (EGM)
 Explanatory statement to the notice
 Altered Memorandum of Association

Step 5: Registration of change in object clause by the Registrar

As per section 13(10), no alteration made under this section shall have any effect until it
has been registered in accordance with the provisions of this section.

As per section 13 (9) The Registrar shall register any alteration of the Memorandum with
respect to the objects of the company and certify the registration within a period of thirty
days from the date of filing of the Special Resolution in accordance with clause (a) of sub-
section (6) of this section.

Therefore once, form MGT-14 is filed, the Registrar will examine the form and register
the change in object clause by issuing a fresh certificate of incorporation.

Important points to remember :

Here another thing to be kept in mind while altering the Object clause of Memorandum
is that the Registrar may ask for adoption of new set of memorandum and articles in line
with the new Companies Act’2013.

The statutory backing for adopting new set of memorandum and articles is given in
Section 6 of the Companies Act’2013 which is given as follows:

“(b) Any provision contained in the memorandum, articles, agreement or resolution

shall, to the extent to which it is repugnant to the provisions of this Act, become or be
void, as the case may be.”

Therefore, the provisions under the old memorandum/articles may be repugnant i.e
contradictory/inconsistent with the provisions of the Companies Act’2013 and hence
may be termed as void therefore it is advisable to adopt new set of memorandum and
articles as per Companies Act’2013.

Major reason for that is the change in format of Memorandum and articles under the
previous act and the new act’2013.
Major difference between the memorandum under Companies Act’1956 and 2013 is the
object clause. While the Object clause under the 1956 Format included three sub-clauses:

 Main objects,
 Incidental and ancillary objects and
 Other objects

The format under the Companies Act’2013 includes only two sub clauses:

 THE OBJECTS TO BE PURSUED BY THE COMPANY ON ITS INCORPORATION

i.e Main Objects.
 MATTERS WHICH ARE NECESSARY FOR FURTHERANCE OF THE MAIN
OBJECTS.

Therefore while altering the object clause it is advisable for the company:

 To amend the title of incidental object Clause of the Memorandum Of

Association by passing the following resolution:

“Clause III (B) of the objects that are incidental or ancillary to the attainment of the main
objects of the Memorandum of Association be and hereby replaced with the title
“MATTERS WHICH ARE NECESSARY FOR FURTHERANCE OF THE OBJECTS
SPECIFIED IN CLAUSE III (A) ARE:-“

 To Delete the other objects clause of the Memorandum Of Association by

passing the following resolution:

“Pursuant to the provisions of Section 4, 13 and all other applicable provisions, if any, of
the Companies Act, 2013, (including any amendment thereto or re-enactment thereof),
and subject to necessary approval(s) if any, from the competent authorities, the Other
Objects Clause of the Memorandum of Association of the Company be removed by
completely deleting the clause III (C)”.

ADOPTION OF NEW SET OF ARTICLES OF ASSOCIATION

Pursuant to the provisions of Section 14 and other applicable provisions, if any, of the
Companies Act, 2013, (including any amendment thereto or re-enactment thereof), the
Articles of Association of the Company should be altered thereby replacing all the
existing regulations with the new regulations.

**Note This article is for private circulation only.